Preamble

The House met at Half past two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

GAS LIGHT AND COKE COMPANY BILL [Lords]

Read the Third time, and passed, without Amendment.

MANCHESTER CORPORATION BILL [Lords]

As amended, considered; an Amendment made; Bill to be read the Third time.

BROMBOROUGH DOCK BILL [Lords]

Read a Second time, and committed.

Oral Answers to Questions — MINISTRY OF SUPPLY

Amphibious Vehicles (Sale)

Mr. Osborne: asked the Minister of Supply whether he is aware that at the recent sale of surplus Government vehicles at Ruddington, Nottinghamshire, 25 amphibious ducks were taken out of the public auction and sold privately for about 5 per cent, of their original cost; and on whose authority and on what grounds was this action taken.

The Minister of Supply (Mr. John Wilmot): It was decided to sell a number of amphibious vehicles at Ruddington by competitive tender before the auction was arranged and they were never, in fact, included among the vehicles to be sold by auction. I have given instructions for some amphibians to be included in future auctions.

Mr. Osborne: Is it not a fact that these ducks, which cost £4,000 each, were sold

for £150 by private treaty? It is believed in the locality that it is a grave scandal. These ducks are at the present time earning, on the South coast, something like £50 a day profit, and it is a scandal which ought to be investigated.

Mr. Wilmot: I have said that they will in future be put in the public auction. These vehicles were sent to Ruddington for breaking down before the auction was decided on. An offer was received for them and they were taken away from the breaking down place. In future they will be offered for auction.

Sir Patrick Hannon: If the allegations contained in my hon. Friend's Question are borne out by the facts, surely it is a matter for further investigation. Are the taxpayers of this country to be treated in this scandalous way?

Mr. Wilmot: I have just said that in future these vehicles will be offered for public sale before they are broken down.

Sir William Darling: Is it the best business method of which this Government can think, to sell vehicles which cost £4,000 far £150? If not, would they not set up a working party of business men to advise them in this matter?

Experimental Work, Wallop

Mr. George Jeger: asked the Minister of Supply why he has withdrawn the licence for cultivation from Southdown Farm. Wallop, Hampshire.

Mr. Wilmot: I assume my hon. Friend refers to the adjoining farm—Juniper Down Farm—which is required for important experimental work. Full facilities for harvesting existing crops have been given.

Surplus Binoculars

Mr. Robens: asked the Minister of Supply whether he is aware that donors of binoculars in 1940 are being refused replacement or the opportunity of purchase from Government surplus stocks; and if he will take steps to remedy this injustice.

Mr. Wilmot: I much regret that administrative difficulties make it impossible to recognise a special claim against surplus Government stores by the many citizens who, in response to appeals during the war, generously made gifts of binoculars and other articles of various kinds.

Mr. Robens: Does not the Minister agree that it is unfair that these public spirited people who freely gave binoculars when the country needed them, should be treated in the same way as citizens who sold them? Will my right hon. Friend reconsider the matter and either give them a pair of binoculars from the Government surplus stock, or sell them a pair for a nominal amount before the binoculars are passed over to private trade to sell through the ordinary channels?

Mr. Wilmot: I very much wish it was possible to do as my hon. Friend suggests, but I have been into the matter very thoroughly, and it would not be possible to treat donors of binoculars differently from the donors of other property which was given to the Government during the war. For some part of the time no records were kept. These were free gifts, and I fear that it would be quite impossible to do what is asked.

Spectacle Lenses

Sir Hugh Lucas-Tooth: asked the Minister of Supply the monthly output of spectacle lenses in this country for the last six months; and what proportion of such output was for export.

Mr. Wilmot: As the answer contains a number of figures, I will, with the hon. Member's permission, circulate it in the OFFICIAL. REPORT.

Following is the answer:

The monthly output of spectacle lenses for the seven four week periods from 24th November, 1945, until 8th June, 1946, was as follows:



Pairs



417,183



337,075



406,042



431,483



452,252



420,630



448,860


Total
2,913,525

5·9 per cent. of this total was exported.

Hand Tools

Major Legge-Bourke: asked the Minister of Supply if he will explain the shortage of joiners' and carpenters' tools.

Mr. Wilmot: The output of hand tools is greater than before the war but the

demand for them to make up wartime arrears and to meet the requirements of the building programme has out-stripped this increase in supply. Production is still to some extent limited by shortage of labour but we are doing our best to improve the position.

Major Legge-Bourke: Is the right hon. Gentleman aware that woodworkers and carpenters say that the position is worse than a year ago and is likely to have a very serious effect on the building programme in London? What steps is he going to take about it?

Mr. Wilmot: We are doing everything possible to increase the supply. The limiting factor is the shortage of skilled labour.

Mr. Bossom: Could the Minister explain the shortage of hand power tools which are so essential in present day work?

Mr. Wilmot: I think the hon. Gentleman ought to put a Question down.

Steel Consumption

Sir Waldron Smithers: asked the Minister of Supply what were the facts which formed the basis that home consumption of steel will be 13,000,000 tons and exports 3,000,000 tons in 1955, considering that the mean curve from 1910 to 1945 included two wars, during which steel production was abnormally high.

Mr. Wilmot: I assume that the hon. Member is referring to the estimate made by the British Iron and Steel Federation in their recent report which was published as a White Paper The estimate of home consumption at 13 million ingot tons a year assumes full employment, and has regard to the long-term upward trend of steel consumption in all industrial countries. The estimated export of 3 million ingot tons is based on the potential world demand and the changes in the supply position since the inter-war years.

Sir W. Smithers: How dare the Government take a gamble on such slender evidence?

Mr. Wilmot: The estimate has been made by some of those most informed in the steel industry. The Government have no reason to differ from it on examination

Sir W. Smithers: It has been accepted.

Motor Vehicles (Production Target)

Mr. Edelman: asked the Minister of Supply whether he expects to reach his target figures for the production of 370,000 private motor cars and 150,000 commercial vehicles for the year 1946.

Mr. Wilmot: Actual production of private cars during the first five months of this year, together with forecasts for the rest of the year, suggest that the outcome will not be far short of the target. There is, at present, no reason to suggest that the target of 150,000 commercial vehicles will not be reached.

Mr. Gammans: What about the 370,000 private motorcars? Would the Minister say whether that figure is likely to be reached?

Mr. Wilmot: I have just replied to that question.

Surplus Cars (Disabled Men)

Mr. Warbey: asked the Minister of Supply what steps he is taking to make additional reconditioned ex-service motorcars available for disabled ex-servicemen, in view of the fact that there are over 800 men with too per cent. disability waiting for such motorcars in addition to many more with lower degrees of disability.

Mr. Wilmot: I am doing my utmost to see that as many surplus cars as possible go through the trade scheme for the benefit of disabled ex-Servicemen.

Mr. Warbey: Is my right hon. Friend aware that some months ago men with as low a degree of disablement as 30 per cent. were encouraged to apply and that there is great disappointment amongst them?

Mr. Wilmot: I can well understand that, but it is no good selling cars to ex-Servicemen when they are not in a proper condition. The cars which are capable of being reconditioned and sold in a guaranteed condition are going that way.

Ordnance Factories (Civil Production)

Mr. Austin: asked the Minister of Supply whether he will provide in the OFFICIAL REPORT a table showing the number and location of Royal Ordnance Factories; and whether he will state the progress achieved in each individual case in the changeover from war to peace production.

Mr. Wilmot: I am circulating in the OFFICIAL REPORT the information for which my hon. Friend asks.
Following is the answer:
The Royal Ordnance Factories maintained at present are located at: Birtley, Bishopton, Blackburn, Bridgwater, Cardiff, Chorley, Dalmuir, Drigg, Enfield, Fazakerley, Glascoed, Hayes, Irvine, Leeds, Maltby, Nottingham, Patricroft, Pembrey, Poole, Radway Green, Swynnerton, Wigan, Woolwich.
It would be contrary to established practice to give details of the production of the individual factories, but civil work is being taken on where capacity is available and the total value of civil orders now on hand amounts to some £5,250,000.

Motorcars (Production Costs)

Mr. Crossman: asked the Minister of Supply by what percentages the present overall costs of labour and materials used in the manufacture and assembly of private motorcars has increased above the 1938 level.

Dr. Segal: asked the Minister of Supply what approximate percentage of the retail price of motorcars is allocated for manufacturers' and distributors' profits, respectively.

Mr. Wilmot: This information is not available and could only be obtained by a very elaborate investigation of prices.

Motor Advisory Council

Mr. Crossman: asked the Minister of Supply what advice or recommendations he has received from the Motor Advisory Council; and whether he will publish the same.

Mr. Wilmot: The National Advisory Council for the Motor Manufacturing Industry is a permanent advisory body designed to provide a means of regular consultation between the Government and the motor manufacturers on matters arising from time to time. Its deliberations are confidential and it would not normally be appropriate to publish its proceedings. I will, however, naturally consider in regard to any special reports I may receive from the council whether publication is desirable.

Perambulator Springs

Mr. Garry Allighan: asked the Minister of Supply whether he is satisfied


that steel manufacturers are delivering the maximum of strip steel for conversion into perambulator springs and not withholding any proportion in favour of other products which are more profitable.

Mr. Wilmot: In spite of high current production, there is a shortage of steel strip to meet all requirements, but I was not aware of complaints from the perambulator spring manufacturers. If my hon. Friend will give me details of any case he has in mind, I will be glad to see if I can help.

Clearing Depot, Watford By-pass

Mr. William Shepherd: asked the Minister of Supply what quantity of iron and aluminium sheet is lying at the ex-L.A.P. depot at Watford by-pass.

Mr. Wilmot: This clearing depot at the moment contains about five tons of iron, 3,000 tons of steel of all kinds and 5,000 tons of aluminium alloy sheet. All this material is now in course of disposal.

Mr. Shepherd: When does the Minister expect to dispose of this material?

Mr. Wilmot: This is a reception depot where stuff is always coming in and going out. It is a continual process.

Agricultural Implements

Colonel Wheatley: asked the Minister of Supply if he will substitute the manufacture of agricultural forks, etc., for the manufacture of bayonets at the royal ordnance factory, Creekmoor, Dorset.

Mr. Wilmot: No, Sir. The plant in this factory is not suitable for the manufacture of agricultural implements.

Colonel Wheatley: Does the Minister realise that manufacturers are unable to give any deliveries of this sort of agricultural fork until 1947; cannot he do something to assist in the situation?

Mr. Wilmot: We are doing all we can but it would not help if we tried to make them on unsuitable machinery.

Motorcars (Resale Prices)

Mrs. Castle: asked the Minister of Supply whether he is aware that new motorcars which have only been run a few miles are being resold at exorbitant

prices; and whether he will take steps to prevent this by prohibiting the resale of new motorcars within a year of their purchase at more than the price paid for them when new.

Mr. Wilmot: Yes, Sir. I understand that the Motor Trade Association is taking steps designed to prevent sales of this kind.

Oral Answers to Questions — TRADE AND COMMERCE

Proposed Factory, Cardiff (Licence)

Mr. George Thomas: asked the President of the Board of Trade what reasons led to the refusal by his Department to allow the Co-operative Wholesale Society to build a mantle factory on ground that was purchased at Taff's Well, near Cardiff,

The President of the Board of Trade (Sir Stafford Cripps): This project would need an initial labour force of some 800 women, increasing to 1,000. Building programmes have already been approved for the Pontypridd-Rhondda area which will fully absorb the female labour force likely to become available. Consequently, I could not agree to the introduction of a project which would add to the potential deficit of women workers to the prejudice of the existing programme. It is for these reasons that the Co-operative Wholesale Society were invited to consider alternative locations for this scheme. The question of the best use to which the site could be put is receiving further consideration.

Mr. Thomas: Is the Minister aware that this Society says that the factory would give employment to at least 100 men, and, in view of the fact that a greater part of the light industries which are coming to South Wales employ female labour or young boys, will he give further consideration to this question?

Sir S. Cripps: The factory could employ 100 men only if there were 1,000 women available, which there will not be.

Footwear Pointing

Mr. W. Shepherd: asked the President of the Board of Trade if he will now consider reducing the points required for the lower-priced ranges of shoes, since productive capacity in these ranges is in danger of exceeding the demand.

Sir S. Cripps: I have under consideration the general question of the pointing of footwear, and I expect to make an announcement shortly.

Mr. Hector Hughes: Will the Minister have particular regard to children's shoes which are said to be in bigger supply?

Sir S. Cripps: I shall have full regard to all sorts.

Mr. Janner: Has my right hon. and learned Friend considered the special position of Leicester, which he promised to consider, particularly in view of the fact that the shops have so many of these shoes available and no one can buy them because of the points?

Sir S. Cripps: That is being considered.

Deaf Aids (Batteries)

Mr. W. Shepherd: asked the President of the Board of Trade why the price of the No. 45 volt battery, which is used almost exclusively in ear-aids for deaf people, has recently risen from 5s. to 7s. 6d.

Sir S. Cripps: I would refer the hon. Member to the answers given to the hon. Member for Reigate (Mr. Touche) on 8th May, and to the hon. Member for Cheltenham (Mr. Lipson) on 24th June. The inquiries being made by the Central Price Regulation Committee are not yet complete.

Mr. Lipson: Can the Minister say when they will be complete?

Sir S. Cripps: I am afraid I cannot.

Soap Export Licence (U.S.A.)

Mr. Sidney Shephard: asked the President of the Board of Trade if he is aware that Messrs. Cussons, Sons and Company, Limited, of Kersal Vale, Manchester, have been granted a licence to export £100,000 value of toilet soap to the U.S.A.; and, in view of the recent cut in supplies to British housewives, if he will cancel this licence and reserve all available supplies to the home market.

Sir S. Cripps: In December last, this firm inquired whether a licence would be granted for the export of special toilet soap to the U.S.A. In view of the special advantages to our export trade, they were informed, after consultation with the Ministry of Food, that a licence would be granted. The firm did not apply for a

licence, however, until 2nd July and, as matters now stand, I am not prepared to grant the licence. The firm have been informed accordingly.

Gin and Whisky (Standard Measures)

Mr. Keeling: asked the President of the Board of Trade what action he is taking on the recommendation of the County Councils Association that standard measures should be used for selling gin and whisky in public houses, etc.

Sir S. Cripps: When a general inquiry into the scope of the Weights and Measures legislation is possible; I will include consideration of the use of standard measures for selling gin and whisky in public houses, etc.

Mr. Keeling: Does the President agree that spirit drinkers are as much entitled to the protection of certified measures as beer drinkers and milk drinkers?

Soviet Timber

Mr. Osborne: asked the President of the Board of Trade what negotiations have been commenced with the U.S.S.R. for the import to the United Kingdom of Soviet soft woods; for how long have these trade talks been proceeding; and what is preventing their successful conclusion.

Sir S. Cripps: The Soviet authorities have been aware for a very long time that in 1946 we should wish to purchase large quantities of soft wood from them, and since August, 1944, have been aware of our requirements. I am in constant touch with the Soviet Trade Delegation on this matter but they have not so far found themselves in a position to make any firm offer.

Mr. Osborne: Is the Minister aware that in the trade there is a feeling that political considerations are preventing the fulfilment of these negotiations and, since this timber is so important to the housing programme, can he not do something about it?

Sir S. Cripps: I assure the hon. Member we are doing all we can about it.

Mr. Osborne: But you have been doing that since 1944.

Mr. Osborne: asked the President of the Board of Trade the value and the quantity of the timber imports to the


United Kingdom from the U.S.S.R. for the 12 months ended 30th June, 1944, 1945 and 1946, respectively.

Sir S. Cripps: As the answer includes a number of figures, I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.

IMPORTS OF TIMBER FROM THE U.S.S.R.



Pitprops.
Softwood (mainly sawn).
Total.



Piled cubic fathoms.
£
Standards.
£
£


12 months ended June, 1944
5,044
101,039
12,917
532,211
633,250


12 months ended June, 1945
11,973
255,709
31,411
1,247,555
1,503.264


July-December, 1945
2,975
59,386
7,626
279,649
339,035


The figures for June are not yet available. There were no imports during January to May 1946.

Textile Machinery (Exports)

Mr. Stanley Prescott: asked the President of the Board of Trade the respective values of new and second-hand textile machinery which have been exported in the last six months; to what countries such exports have been made; and to what respective value.

Sir S. Cripps: Exports of new and second-hand textile machinery are not recorded separately, and I am accordingly not in a position to supply the desired information.

Mr. Prescott: Cannot the right hon. and learned Gentleman at least give the total figures for both new and second-hand exports?

Sir S. Cripps: I am afraid not, because they are not recorded in that way.

Cotton Purchasing System

Mr. Marples: asked the President of the Board of Trade whether he will authorise an official ballot, on the usual democratic lines, of all the cotton spinners to ascertain how many are in favour of making their purchases under the prewar system of trading and how many are in favour of making their purchases from a central buying commission under Government control.

Sir S. Cripps: No, Sir.

Mr. Marples: Is the right hon. and learned Gentleman aware that the Federation of Master Spinners recently

Captain Marsden: Can the Minister say whether this timber which comes to this country comes in British or Russian ships?

Sir S. Cripps: Perhaps the hon. and gallant Member will put that down.

Following is the answer:

held a ballot on such lines, and that less than one per cent. were in favour of buying from a central Government buying agency and over 99 per cent. in favour of a return to the normal conditions? Will not a democratic Minister and a democratically minded Government take that fact into account?

Sir S. Cripps: If the ballot has already been taken, it is unnecessary to consider it.

Mr. Marples: asked the President of the Board of Trade whether Liverpool is to be the centre of the new Government-controlled cotton buying scheme.

Sir S. Cripps: No decision has yet been reached as to the headquarters of the proposed Cotton Buying Commission. It is, however, intended that it should be in Lancashire.

Mr. Marples: Will the right hon. and learned Gentleman consider that Liverpool is the centre of Lancashire from this point of view?

Sir S. Cripps: It is one of the centres, certainly.

Flax Crops

Mr. Hurd: asked the President of the Board of Trade if any of the 1944 and 1945 flax crops grown under contract for his Department still remain on farms; and if he will state the tonnages of fibre and linseed involved.

Sir S. Cripps: On 31st May, 1946, there was on the farms an estimated weight of


37,000 tons of flax grown under contract during 1944 and 1945. The quantity outstanding from 1944 was very small. Until the crop is processed, the actual tonnages of fibre and seed involved can only be estimated. On the basis of average yields, the weight of fibre to be expected is approximately 2,400 tons and of seed approximately 3,300 tons.

Mr. Hurd: As we do not seem to have been very successful in buying linseed from the Argentine, would it not be a very good idea to use these 3,000 tons of linseed on our own farms?

Sir S. Cripps: We shall, no doubt, use it as soon as it is available.

Polish Timber

Mr. Lipson: asked the President of the Board of Trade, with regard to the condition imposed by his Department for the granting of a licence to import up to £2,000,000 of timber from Poland that the money should be spent in Britain, preferably on surplus military stores, if he will give the reasons why the preference was for military stores.

Sir S. Cripps: I am not aware of the proposed transaction or condition to which the hon. Member refers.

Mr. Lipson: In view of the fact that statements have recently appeared in the Press, will the Minister give instructions for the issue of a denial when statements like this are made?

Sir S. Cripps: I am afraid we should be too busy to issue a denial on every occasion when such statements are made.

U.S.S.R. (Trade Negotiations)

Mr. Boothby: asked the President of the Board of Trade whether, in the forthcoming trade negotiations with the U.S.S.R., he will make the necessary arrangements for an annual export of cured herring from this country to the U.S.S.R and the territories under her control

Mr. Gammans: asked the President of the Board of Trade what progress has been made with a new trade agreement with the U.S.S.R.

Mr. Edelman: asked the President of the Board of Trade whether he will make a statement on the progress of Anglo-Soviet trade conversations.

Mr. Edelman: asked the President of the Board of Trade what progress has been made towards a trade agreement with the U.S.S.R.; and whether he is in a position to make a statement on the subject.

S. Cripps: I am in touch with the new head of the Soviet Trade Delegation, who has recently arrived in this country, but I am not yet in a position to make a statement.

Mr. Gammans: would the Minister say whether there has been any case where orders were given by the Soviet Government for British goods of which they subsequently refused to take delivery?

S. Cripps: I think that if the hon. Member will put that question on the Paper, I will answer it.

Mr. Boothby: May I ask the President if, when any future negotiations take place, the interests of the herring industry will be borne continuously in mind?

Mr. Edelman: Would the Minister, pending an agreement with the Russians, invite them, as a gesture of goodwill, to ship the undelivered balance of the 1935 contracts, while we reciprocally do the same?

Sir S. Cripps: I shall explore all methods.

Squadron-Leader Kinghorn: asked the Minister of Agriculture if he will see that, in any impending trade negotiations with the U.S.S.R., steps will be taken to develop once again the old export trade of herring to that country from East Anglian ports.

The Minister of Agriculture and Fisheries (Mr. Thomas Williams): I will bring this matter to the notice of my right hon. Friend the President of the Board of Trade who no doubt will bear in mind the desirability of reviving these exports to the fullest possible extent in any trade negotiations undertaken with the U.S.S.R.

Mr. Boothby: Has the right hon. Gentleman noticed that the President of the Board of Trade is rather lukewarm about this business, and will he give an undertaking to keep him up to the mark?

Mr. Williams: I felt that my right hon. Friend was rather enthusiastic.

Mr. Douglas Marshall: Will the Minister take pilchards into consideration when such negotiations take place?

Wood Pulp (Norway and Sweden)

Mr. Heathcoat Amory: asked the President of the Board of Trade whether increased imports of wood pulp for paper-making will be obtainable from Norway and Sweden during the next 12 months.

Sir S. Cripps: Discussions in regard to supplies of pulp for paper making from Norway and Sweden for the next 12 months are proceeding, but it is clear that the supply position will continue to be difficult.

Mr. Wilson Harris: Is the Minister aware that a statement was made by the chairman of a firm of papermakers last week to the effect that we cannot get wood pulp from Norway and Sweden because, in the absence of coal from this country, they are burning their wood?

Sir S. Cripps: That is undoubtedly one of the difficulties.

Mr. Amory: Is the right hon. and learned Gentleman aware that the Minister of Labour was reported in the newspapers recently as saying that Norway and Sweden were getting into their stride again and that larger supplies could be expected, and does he consider that statement to be compatible with the reply he has just given?

Sir S. Cripps: It is quite compatible, but I cannot say, until we have completed the negotiations, what the outcome will be.

Cotton Control

Sir W. Smithers: asked the President of the Board of Trade if, in view of the fact that the period of notice to the cotton trade is extended until 30th September, he will state, in order to relieve anxiety in the trade, in what form he proposes to continue control after 1st October.

Sir S. Cripps: I assume that the hon. Member is referring to the control of raw cotton supplies. The only change proposed to be made at 30th September is that the distribution of raw cotton to spinners or their buying brokers will be carried out direct by the Cotton Control, instead of through the agency of the cotton trade merchants, as at present. Notification of this change has already been made to the trade.

Sir W. Smithers: Will the President say how the Cotton Controller can act as trustee for an organisation which has never been set up, as was officially announced by the Parliamentary Secretary?

Sir S. Cripps: He is not acting as trustee, but as a Cotton Controller.

Boot and Shoe Working Party

Mr. Attewell: asked the President of the Board of Trade if he has received the report of the working party of the boot and shoe industry; and at what date may publication be expected.

Sir S. Cripps: I expect to receive the Boot and Shoe Working Party report towards the end of this week. I hope that it will be published in the course of August.

Pool Promoters (Paper)

Mr. James Callaghan: asked the President of the Board of Trade if he is aware of the adverse comment in South Wales about the waste of paper by Little-wood's and Sherman's pools, who have flooded the area with circulars; and on what basis paper is supplied for this purpose.

Sir S. Cripps: Under the Control of Paper No. 70 Order, 1945, any person may distribute gratuitously in any period of three months up to 20 per cent, of the weight of advertising circulars relating to his trade or business distributed in the corresponding three months in the year ended 31st August, 1939. Pool Promoters are covered by the Order and I have no reason to believe that they are infringing its terms.

Mr. Callaghan: Will my right hon. and learned Friend consider, next time he makes a further order, restricting paper to these people while there are many more worth-while institutions?

Mr. W. Shepherd: Will the Minister say whether Government Departments are controlled by the same regulations?

Sir S. Cripps: No, Sir.

Mr. Kirby: Is it not a fact that these people are using only 3 per cent. of their prewar paper, that they were encouraged to distribute these circulars in order to deal with the unemployment problem, and cannot that be increased?

Sir S. Cripps: They are getting a very small quantity.

Mr. Skeffington-Lodge: Will my right hon. and learned Friend bear in mind that the whole trend of the activities of the pools is anti-social?

Sir S. Cripps: That is not a matter which we can take into account in regard to the distribution of paper.

Export Trade (Output)

Major Legge-Bourke: asked the President of the Board of Trade if he will give an estimate of the decline in the output per person employed in the export trade as compared with 1938.

Sir S. Cripps: Information is given in the Monthly Digest of Statistics about output and employment in most of the principal industries, including many which do a substantial amount of export trade. It is not possible to make any estimate of the extent to which output per person has changed compared with 1938 for export production taken as a whole, because no statistics were collected before the war of the number of workers engaged on export production.

Major Legge-Bourke: Is it not a fact that the increase in the number of people employed in the export industry is greater than the increase in the volume over 1938 figures?

Sir S. Cripps: As we have no accurate statistics of the number employed in the export industry in 1938, I cannot say.

Cotton Supplies

Sir W. Smithers: asked the President of the Board of Trade in view of the fact that the removal of price controls in America has caused cotton prices to rise there, what steps he has taken to secure supplies of cotton for the British consumer by dealing in futures; in which markets; and to what amounts.

Sir S. Cripps: Large stocks of cotton are held by the Control in the United Kingdom and in certain overseas countries. Further purchases are made from time to time in the light of requirements and market conditions. These supplies can be secured without the Control dealing in futures. In accordance with normal selling practice in the United States, offers by shippers of American

cotton are made at prices related to New York market futures quotations.

Sir W. Smithers: Is the right hon. and learned Gentleman aware that by closing the Liverpool Cotton Exchange he has driven the business of that exchange to foreign competitors? The business done by the Liverpool Cotton Exchange meant considerable invisible exports. Why has he driven that business away from Liverpool?

Sir S. Cripps: That is another question.

Sir W. Smithers: Not at all. The right hon. and learned Gentleman is avoiding it.

Company Law Amendment

Mr. Ronald Chamberlain: asked the President of the Board of Trade whether it is the intention of the Government to give early effect to the recommendations of the Cohen Report on Company Law Amendment.

Sir S. Cripps: Yes, Sir, as soon as Parliamentary time can be arranged.

Mr. Chamberlain: Since this very important Measure was conceived by the Minister some nine months ago, does he not consider that this is now "the fullness of time," and can he not bring forth the Bill?

Sir S. Cripps: It depends on what else Parliament has to do.

Mr. Walter Fletcher: Will the right hon. and learned Gentleman see that the recommendations of the Committee are applied equally to the Government Departments concerned?

Sir S. Cripps: They do not apply.

Poultry Food (Exports, France)

Mr. Stubbs: asked the President of of the Board of Trade the number of tons of prepared poultry food exported to France during the last three months.

Sir S. Cripps: There were no exports of poultry food to France during this period. The only exports of animal feeding stuffs consisted of ground nut, cake and meal.

Steel Tubes (Export)

Mr. Pickthorn: asked the President of the Board of Trade whether the export of steel tubes has been recently, or is now, hindered by any withholding or limiting of export allocations of steel.

Sir S. Cripps: Exports of steel tubes are limited by the overall amount of steel for all purposes which can be made available for export. So far as the allocation of steel to the Board of Trade is concerned, the proportion available for the production of tubes for export has been agreed with the industry.

Leather Prices

Mr. Boyd-Carpenter: asked the President of the Board of Trade to what extent an increase in the price of leather is contemplated by his Department.

Sir S. Cripps: No particular increase is contemplated in the prices of leather to footwear manufacturers. Some increase may take place in certain other cases.

Mr. Boyd-Carpenter: Can the right hon. and learned Gentleman say whether that increase will be the result of the collapse of the International Leather Committee?

Sir S. Cripps: It will be the result of higher prices which have to be paid for leather if that is the case.

Cigarettes

Mr. Royle: asked the President of the Board of Trade what steps he proposes to take in order to ensure that, with the reduction on the overseas requirements of the Services, further quantities of cigarettes are made available to help meet the needs of demobilised men and women.

Sir S. Cripps: Owing to the reduction in the overseas requirements of the Services, an increase from 115 per cent. to 120 per cent. has been authorised in the clearances from bond of leaf for the home trade. This will allow increased supplies of cigarettes to reach the shops as soon as possible after the home trade manufacturers have made the necessary arrangements for increased production.

Mr. Royle: Can my right hon. and learned Friend say when we shall see some sign of these cigarettes?

Sir S. Cripps: I hope, very shortly.

German Timber

Mr. Bossom: asked the President of the Board of Trade why he is not using timber available in the British zone in Germany to prevent continued suspension of licences for special occasional furniture.

Sir S. Cripps: The maximum quantity of timber possible is being obtained from the British zone of Germany. I regret that owing to other more urgent requirements, none is available for special occasional furniture.

Mr. Bossom: Is the Minister aware that there is an unlimited quantity of timber along the main autobahn which goes right through into Berlin, which could be taken easily? The wood is there and could be obtained.

Sir S. Cripps: I am aware that there are great supplies of timber in Germany, but the trouble is to get it cut, taken to the ports and brought here.

Footwear Repairs (Cost)

Mr. Tiffany: asked the President of the Board of Trade if his attention has been called to the high cost of footwear repairs; and whether he will bring to an end, at an early date, the present arrangements for the licensing of footwear repairers, in order to avoid monopoly conditions and thus lower the present charges.

Sir S. Cripps: The maximum charges for footwear repairs are less than 40 per cent. above the level of charges in August, 1939. The recent increase of approximately 3 per cent. was allowed after the Central Price Regulation Committee had investigated the effect of increases in the costs of labour and material. I regret that I cannot abandon the licensing of footwear repairers until leather supplies improve, nor would such a course lead to a reduction in price. On the contrary, it would almost certainly lead to an increase.

Oral Answers to Questions — CIVIL AVIATION BILL (CHANNEL ISLANDS)

Colonel Crosthwaite-Eyre: asked the Prime Minister under what authority His Majesty's Government, or any statutory corporation established on its behalf, are proposing compulsorily to acquire the assets and undertakings of any company registered and domiciled in the Channel Islands.

The Prime Minister (Mr. Attlee): I am not aware of any such proposal.

Colonel Crosthwaite-Eyre: Is the Prime Minister aware that the Parliamentary Secretary to the Ministry of Civil Aviation;


on 8th July, made a statement that he would take over the Channel Island Airways by Order in Council? Is he further aware that no Order in Council, since the incorporation of the Channel Islands under the British Crown, has ever been made compulsorily acceptable by the Government of the Channel Islands?

The Prime Minister: I am not aware that the position is as stated by the hon. and gallant Member, but perhaps he will put down a question to the Minister of Civil Aviation.

Mr. Lennox-Boyd: May I ask the Prime Minister whether he is not aware that a specific statement was made in this House that the Civil Aviation Bill would be applied by Order in Council to the Channel Islands, and whether he will inquire whether the consent of the State of Jersey was obtained before that statement was made?

The Prime Minister: I am not aware that the statement was made. A statement was made, perhaps, in regard to the regulations for the landing of planes in this country from the Channel Islands, which seems to be an entirely different matter.

Colonel Crosthwaite-Eyre: Does that mean that that statement was made without the authority of the right hon. Gentleman and, secondly, will the Prime Minister have a look at the passage in HANSARD for 8th July in which the Parliamentary Secretary to the Ministry of Civil Axiation stated definitely that he will take over this air line by Order in Council?

The Prime Minister: Certainly, if the hon. and gallant Gentleman refers me to a statement, I shall be glad to give him a fuller answer, but I am afraid that I have not the time to read every word in HANSARD.

Oral Answers to Questions — BOOK SHORTAGE

Mr. Henry Strauss: asked the Prime Minister whether he is aware that education is being hampered or prevented by the shortage of suitable books; what organ of Government decides on the allocation of foreign exchange between various classes of imports; and why the importation of films and cosmetics has been preferred to that of the raw materials of books.

The Prime Minister: Yes, Sir. I regret that both schools and universities are hampered by the present shortage of books. Extra supplies of paper have, however, been made available to publishers for use in educational books. As regards the second part of the Question, my right hon. Friend the Chancellor of the Exchequer gave a full explanation of the procedure in the House on 14th February. The allegation in the last part of the Question is quite unfounded.

Mr. Pickthorn: Will the Prime Minister consider whether imports of books in foreign languages might not be exempted from exchange restrictions on the ground that the intellectual advantage gained will be very much greater than the currency lost?

The Prime Minister: That is a matter to be considered, but, no doubt, all of us, in our personal capacities, have sometimes felt that we had not the money to spend on books which we badly wanted.

Mr. Strauss: Am I to understand from the right hon. Gentleman's answer to the last part of my Question that shortage of shipping space is no part of the cause of the shortage of raw materials for books?

The Prime Minister: There is nothing about the shortage of shipping space in the original Question which asks "why the importation of films and cosmetics has been preferred to that of the raw materials of books."

Mr. Strauss: As permission has recently been given for the importation of those articles, does it not follow? Is it not a mistake to throw the cargo overboard in order to provide extra space for the bilge?

Lieut.-Colonel Sir Thomas Moore: Could the Prime Minister say what proportion of pulp and paper is imported from abroad compared with the supplies available in this country?

The Prime Minister: I am afraid that I could not answer that question without notice. In any case, it should be put down to another Minister.

Oral Answers to Questions — GERMANY

Potash Production

Mr. Douglas Marshall: asked the Chancellor of the Duchy of Lancaster


what quantities of potash have been produced in the British zone of Germany since the occupation; what quantities have been exported; and to what countries.

The Chancellor of the Duchy of Lancaster (Mr. John Hynd): Approximately 286,000 metric tons of potash fertiliser have been produced in the British zone of Germany up to 1st July, 1946. Some 62,000 metric tons have been exported; 17,000 to the United Kingdom, 16,000 to Belgium, 7,000 to Denmark and 22,000 to Holland.

Book Publication

Mr. Frank Byers: asked the Chancellor of the Duchy of Lancaster the total number of books passed for publication in the British zone in Germany; and the number actually published.

Mr. J. Hynd: The total number passed for publication is 937, of which 439 have actually been published.

Mr. Byers: Is the Minister taking any further steps to increase the numbers published?

Mr. Hynd: The reason why more are not published is the difficulty with regard to paper production. What steps it has been possible to take, have been taken. The difficulty is mainly manpower, the cutting and transport of the necessary timber and the supply of coal for the paper mills.

Reparations (Soviet Claim)

Professor Savory: asked the Secretary of State for Foreign Affairs whether he is now in a position to make a statement with regard to his refusal to agree to the Soviet claim for reparations from Germany of 10,000,000,000 dollars.

The Under-Secretary of State for Foreign Affairs (Mr. McNeil): In the course of the discussions in the Council of Foreign Ministers my right hon. Friend said that the only agreement regarding reparation from Germany which His Majesty's Government accepted was that in the Potsdam Protocol. At the final meeting my right hon. Friend stated formally that His Majesty's Government did not agree with M. Molotov's interpretation of the Potsdam Protocol in regard to reparation, and that he would be circulating a paper to the other Governments in due course setting out the British point of view. This

statement is now being prepared and will be circulated to the other three Governments through the diplomatic channel as quickly as possible.

Professor Savory: Could not the hon. Gentleman point out that if 10,000,000,000 dollars of reparations were accorded to Russia there would be nothing whatever left for any of the other Allies?

Mr. McNeil: I would like to feel that that was a line of argument we could pursue. While I do not want to enter into details, our statement did amount to a refutation of the Russian claim.

Oral Answers to Questions — AUSTRIA

Food Production

Mr. S. Shephard: asked the Chancellor of the Duchy of Lancaster the approximate stocks of bread grains in the British zone in Austria, other than those held by U.N.R.R.A; and the steps which have been taken to encourage food production.

Mr. J. Hynd: There are no such stocks for Austrian consumption. To encourage indigenous food production, seeds, fertilisers, insecticides and veterinary supplies have been imported; the local production of agricultural machinery is being encouraged; the areas under bread grains and potatoes have been increased; extra transport has been provided; improved methods of collecting farm produce have been recommended to the Austrian Government; allotment holdings have been developed in both town and country districts.

German Assets

Mr. Gammans: asked the Secretary of State for Foreign Affairs what reply has been sent, or will be sent, by His Majesty's Government to the demand of the Soviet Government to take over and control all former Germany property in Eastern Austria.

Professor Savory: asked the Secretary of State for Foreign Affairs whether he is now in a position to make a statement on the protest handed by the British authorities in Vienna to the Russians against the transfer to U.S.S.R. of property alleged to belong to Germans in Vienna.

Mr. McNeil: An order purporting to be signed by the Commander-in-Chief of


the Soviet zone in Austria dealing with the transfer to the U.S.S.R. of German property in Eastern Austria was published in the Press in Vienna on 6th July. General Steele, the officer commanding in Vienna, has addressed a communication to the Soviet Commander-in-Chief on behalf of His Majesty's Government, pointing out that the Soviet interpretation of what constitutes German assets in Austria is not contained in any existing agreement between the Allies, and asking for an assurance that no unilateral action would be taken pending quadripartite agreement. At the last meeting of the Council of Foreign Ministers in Paris on 12th July, my right hon. Friend proposed that a four-power commission should be established to report to the Council upon a definition of what constitutes a German asset in Austria. A definition was circulated which His Majesty's Government would support; and my right hon. Friend stated that His Majesty's Government would, for their part, be prepared to undertake that, pending the Commission's report, no further German assets should be taken over in Austria. Not all the Ministers were prepared to discuss this proposal which it is intended to pursue through the diplomatic channel.

Mr. Gammans: Would the hon. Gentleman say when the letter was sent off to the Soviet Government on this subject; and would he say what was the result of the representations which were made in Paris by his right hon. Friend?

Mr. McNeil: I am sorry, but I could not give the exact date. As quickly after 6th July as we could get authority we did write. On the second point, I have already indicated that it was not possible to do it at the Council level, but we are pursuing the matter by normal diplomatic methods.

Oral Answers to Questions — AGRICULTURE

Grassland Ploughing Grant (Extension)

Mr. Hurd: asked the Minister of Agriculture if he intends to extend the ploughing grant on three-year leys beyond 31st July.

Mr. T. Williams: Yes. Sir. In view of the continuing need for the maintenance of

the tillage area, the Government have decided that the period during which grants will be payable in respect of the ploughing of both three-year and seven-year grassland shall be extended to 31st March, 1947. The conditions of grant in respect of seven-year grassland will be unchanged. In regard to the three-year grassland, grant will now be payable in respect of all such land ploughed before 31st March, 1947, and sown to crops for the harvest of that year. Where, however, as a condition of grant, the approval of the agricultural executive committee has been given to bare on bastard fallowing and sowing in the autumn to crops for the harvest of 1947, such condition will continue to apply.

Storm Damage

Mr. Medlicott: asked the Minister of Agriculture if he will take steps to institute a scheme of mutual insurance, whereby farmers and smallholders may obtain some recompense for storm damage to their crops as has recently occurred in Norfolk.

Mr. T. Williams: There is already in existence a farmers' mutual insurance society which is prepared to give facilities for insurance against storm damage; and similar factilities can also be obtained from other insurance companies

Mr. Dye: asked the Minister of Agriculture if he is aware of the damage to crops in south-west Norfolk by hailstorm on 2nd July; and what steps he proposes to take to assist the farmers to carry on who have lost the whole of their crops.

Mr. Stubbs: asked the Minister of Agriculture if he has considered the damage to crops caused by the recent storms in the Newmarket and Soham district of Cambridgeshire; and if he will consider some form of compensation to the small farmers involved.

Mr. T. Williams: I naturally feel great sympathy with those who have suffered, and in their interests as well as in the interests of food production I have asked the chairmen of the agricultural executive committees for Norfolk and the other counties affected to ensure that the committees render all the assistance that is within their power, both by way of help in the rehabilitation of holdings where damage has occurred, and in securing


alternative employment for men and machinery rendered idle. I regret that I can hold out no hope of Government financial assistance on account of losses caused by weather.

Major Legge-Bourke: Will the right hon. Gentleman give further consideration to the possibility of providing feeding stuffs for those people whose home-grown feeding stuffs have been completely destroyed?

Mr. Williams: That is, of course, one of the items which the county executive committees will take care of.

Mr. Stubbs: Is my right hon. Friend aware that some of the small owners involved in this calamity have lost everything, some of them ex-Servicemen, and does he not think that some provision should be made to meet a calamity of this kind?

Mr. Williams: As I have already explained, action has been taken through the county executive committees to render all possible assistance to those who have suffered as a result of the storms referred to. Unfortunately, however, this is not one of those cases where the Government have felt disposed to render direct financial assistance as a result of disaster caused through storm.

Mr. R. A. Butler: Have instructions been sent to the Essex War Executive Committee and others, because we have had damage there?

Mr. Williams: I was not aware that Essex had had any damage, but, if it has, I assume that its war agricultural committee will be communicated with.

Grain Threshing, Essex

Captain Gunter: asked the Minister of Agriculture if he is aware of the large number of unthreshed grain stacks now standing in south-east Essex and of the damage being done to them by vermin; and what steps he proposes to take to expedite the threshing of these stacks.

Mr. T. Williams: I am informed that the threshing of grain in South East Essex is progressing rapidly, and it is hoped to complete it within the next week. The second part of the Question does not, therefore, arise.

Grain Sacks

Mr. Turton: asked the Minister of Agriculture whether he is satisfied that there are sufficient sacks for use in tie threshing of home-grown wheat this harvest.

Mr. T. Williams: While I can give no guarantee that local shortages will not occur, I am satisfied that all practicable steps have been taken to safeguard the supply of sacks for the coming threshing season.

Mr. Turton: Will the Minister bear in mind that his recently announced policy of giving a higher price for August and September will mean that a greater number of sacks will be needed, and will he make proper representations to his colleagues?

Mr. Williams: I agree that there may be a shortage here and there, but I can assure the hon. Member that we are doing our best.

Rotary Hoes

Mr. S. Shephard: asked the Minister of Agriculture the production of rotary hoes in this country during the last three months; and what percentage of these implements were exported.

Mr. T. Williams: As these machines are made by only one firm, I regret that I cannot give figures of production. During the past three months 60 per cent. of the output has gone for export. Arrangements have recently been made for a major proportion of the output to go to the home market during the next few months.

Mr. Shephard: Is the Minister aware that farmers are complaining that they cannot get delivery of these machines, and will he take steps to see that their requirements are fulfilled before he deals with the export market?

Mr. Williams: As I explained, a recent decision has been taken to reserve the greater proportion of these machines for home use.

New County Committees

Mr. Hurd: asked the Minister of Agriculture if he has now completed the selection of nominees to form the new county agricultural committees in succession to the W.A.E.C.s; on what date will they take office; and if they will be responsible for obtaining the required minimum acreages of wheat and potatoes for the 1947 harvest.

Mr. T. Williams: The selection of members of the new committees is now practically complete. One of the committees has already taken office, and the remainder will do so during the next few weeks. The new committees will, of course, take over all the responsibilities of the present committees as from the date of their appointment.

Mr. Hurd: Can the Minister tell us the name by which these new committees will be known?

Mr. Williams: I hope to be able to do that within two or three weeks' time.

Mr. Tiffany: Can the Minister tell the House the names of the members forming these committees?

Mr. Williams: I doubt whether one could give that sort of information in answer to a question.

Prisoner of War Labour

Mr. Manningham-Buller: asked the Minister of Agriculture whether he is satisfied that in South Northamptonshire there is an adequate amount of prisoner of war labour to meet the requirements of farmers at the present time; and that there will be sufficient for the getting in of the harvest.

Mr. T. Williams: Steps to augment the supply of German prisoners in Northamptonshire are in hand, and everything possible will be done to ensure that sufficient labour is available in the county for the harvest period.

Mr. Skeffington-Lodge: Will my right hon. Friend bear in mind the desirability of maintaining close collaboration with the War Office with a view to enabling these prisoners of war to return to their homes in Germany at the earliest possible moment, or, at least, giving them some idea of when they may go home?

Poles

Vice-Admiral Taylor: asked the Minister of Agriculture whether, in view of the necessity for more agricultural labourers, he will take steps to ensure the employment of Poles available in this country for work on the land.

Mr. T. Williams: The question of the employment of members of the Polish Forces in agriculture is under consideration in connection with the resettlement

plans announced by my right hon. Friend the Secretary of State for Foreign Affairs on 22nd May last.

Vice-Admiral Taylor: Is the Minister aware that there is an obligation on the part of the Government to give employment to these Poles? They are doing nothing in this country and they ought to be employed, especially where it is so necessary to have these men on the land.

Mr. Williams: The matter is under active consideration.

Professor Savory: Will the right hon. Gentleman bear in mind that 80 per cent. of the Poles engaged in the Army of General Anders were employed in agriculture and, therefore, they are eminently suitable for this sort of work in this country?

Mr. Williams: I am not aware of those facts.

Professor Savory: It is a fact. General Anders said so.

Committees (Representation)

Mr. Garry Allighan: asked the Minister of Agriculture whether he will give an assurance that he will adhere to the policy of appointing an equal number of representatives of farmers and farm workers, chosen by their respective organisations, on all the committees and other bodies he has set up.

Mr. T. Williams: The composition of a committee must depend on its functions, and I cannot see my way to adopt the policy referred to.

Mr. De la Bére: Why does the right hon. Gentleman not make the obvious choice? Why does he always have on these committees persons who know nothing about the subject? It is an extraordinary thing.

Oral Answers to Questions — BASKING SHARKS (DAMAGE)

65. Mr. D. Marshall: asked the Minister of Agriculture if he is aware of the damage being caused by basking sharks in St. Austell and adjoining bays, to fishermen's boats and equipment; and if he will consult with the Admiralty with a view to the use of their fishery protection vessels to destroy these sharks which are entering the bays in increasing numbers.

Mr. T. Williams: Yes, Sir. Arrangements have been made with the local naval authorities for naval vessels in this area to assist in destroying any basking sharks which they may encounter.

Oral Answers to Questions — INDIA

Government Employees (Terminal Leave)

83. Mr. Boyd-Carpenter: asked the Under-Secretary of State for India whether he will modify the ruling under which temporary employees of the Government of India are compelled to take terminal leave due to them in India.

The Under-Secretary of State for India (Mr. Arthur Henderson): There is no ruling compelling temporary employees to take the terminal leave due to them in India.

Mr. Boyd-Carpenter: If I send to the Under-Secretary details of a case in which such a condition was sought to be imposed, will he overrule the decision in that case?

Mr. Henderson: I will certainly look into it.

Indians, South Africa

84. Mr. Pritt: asked the Under-Secretary of State for India whether he is aware that Mr. Sorabjee Rustomjee was recently sentenced to three months' hard labour in Durban for making a peaceful protest by way of passive resistance in relation to land in Durban prohibited to Indians; and if he will secure that the Indian High Commissioner will intervene with the Government of the Union of South Africa to avoid such incidents.

Mr. A. Henderson: I have seen a Press report of the matter, but have no official information. As my hon. and learned Friend will be aware, the Government of India have recently recalled their High Commissioner for consultation.

Mr. Pritt: Will the Minister do something to persuade the Government of India to take some interest in the Indians in South Africa?

Mr. Henderson: I think my hon. and learned Friend is a little hard upon the Government of India. The Government of India have recalled their High Commissioner and have terminated the trade agreement between India and South

Africa. I think that is a sufficient indication of the interest they are taking.

Mr. Pritt: Having deprived themselves of the opportunity of making direct representations, will they make some other representations?

Mr. Henderson: They have not deprived themselves of the opportunity of making representations. They have recalled their High Commissioner for consultation, but there is still an official in South Africa, and if the Government of India desire to make representations the channel of communication still exists.

Mr. Godfrey Nicholson: Would it not be best in this case to leave this very ticklish matter, about which there is such great feeling in India, to direct contact between India and the Union of South Africa?

Mr. Henderson: Yes, there is no intention of interfering. The Government of India have complete discretion in dealing with this matter.

Civilian Sea Passages

85. Mr. Nicholson: asked the Under-Secretary of State for India if he will publish a statement showing the number of civilian sea passages from India to this country during May and June, and the estimated number for July; and whether he will explain the system of priorities that applies.

Mr. A. Henderson: As the reply is rather long, I will, with permission, circulate it in the OFFICIAL REPORT.

Mr. Nicholson: Will the hon. and learned Gentleman add something to show how the figures already obtained for passages in the near future compare with the accumulation of applications for passages?

Mr. Henderson: I think it will assist the hon. Gentleman if I state that during May the number of civilian passages was 3,245; June, 3,910; and July, about 2,000.

Mr. Nicholson: What I meant was, could the hon. and learned Gentleman say how many applications there are pending, and how many people waiting?

Mr. Henderson: I think that what is technically called the back log has been substantially reduced as a result of these passages, but I cannot give the exact number.

Following is the statement:

The number of civilian passages provided from India to this country during May was 3,245, and in June 3,910, while the estimated lift for July is about 2,000. There are eight categories of priority, and applicants are allocated to a category according to the reasons for making the journey given on the application form. A list of the categories, which is printed on the form, is set out below.

SCHEDULE OF PASSAGE PRIORITIES

Priority I

Government servants on duty and non-officials travelling on Government business or certified by Government to be travelling for a purpose essential to the national effort.

Applications under this category must be supported by a certificate from the Government Department concerned, stating the latest months by which the applicant must leave India if the purpose of the journey is to be achieved. Families cannot travel under this priority unless the head thereof is to be out of India for at least 8 months.

Priority II

Persons on whose behalf it is certified by a Provincial Medical Board that early passage is essential to save life or reason.

Priority III

Persons certified by Government to be travelling in the national interest or for furtherance of the national effort, or persons travelling to join certified appointments in the United Kingdom.

Applications under this category will state the month in which the applicant must leave India if the purpose of the journey is to be achieved, Families cannot travel under this priority unless the head thereof is to be out of India for at least 8 months.

Priority IV

Persons on whose behalf it is certified by a Provincial Medical Board that early passage is essential to save permanent impairment of health.

Priority V

(a) Higher compassionate cases.
Government servants and their families recruited from the United Kingdom on contract guaranteeing repatriation whose contracts have expired or been terminated and who do not qualify for Priority I or II.
(b) Key officials and non-officials and their families. Unaccompanied families may travel on this priority up to six months in advance or arrear.
(c) Children between ages 12 and 16, with their guardians, going to the United Kingdom for education.
(d) Children between ages 9 and 11, with their guardians, going to the United Kingdom for education.
(e) Retiring civilians (official or non-official) and their families, who are recommended by Provincial Governments/National Service Advisory Committees for this priority. Unaccompanied families may travel on this priority up to six months in advance or arrear.

(f) Persons travelling on urgent business whose application is supported by a Government department. Families cannot travel under this priority unless the head thereof is to be absent from India at least eight months.

Families, the head of which has been transferred to the Far East.

Priority VI

(a) Adults going to the United Kingdom for higher education. Applications must be supported by proof of admission to a University, Technical Institution, etc., and of residential accommodation.
(b) Children between ages 6 and 8, with their guardians. going to the United Kingdom for education.
(c) Compassionate cases who do not qualify for V(a).

Priority VII

Retiring civilians (official and non-official) and their families who do not qualify for Priority V(e).

Priority VIII

Those applicants who do not qualify for a higher priority.

Oral Answers to Questions — BURMA (OFFICIAL VISIT)

87. Mr. Rees-Williams: asked the Under-Secretary of State for Burma whether, in view of the urgent necessity for a Member of the Government to visit Burma in the immediate future to contact leaders of Burmese opinion and to see the state of the country, he will make such a visit without delay.

The Under-Secretary of State for Burma (Mr. Arthur Henderson): No, Sir. In the view of my noble Friend no good purpose would be served by such a visit at the present time.

Mr. Rees-Williams: In view of the fact that the Minister is not prepared to go himself, would he be prepared to send a Parliamentary delegation, because in the opinion of many people it is desirable that some important body of persons should go to Burma soon?

Mr. Henderson: That is an entirely different question Perhaps my hon. Friend would put down a Question.

Oral Answers to Questions — SHANGHAI

Ex-Police Officers (Employment)

88. Mr. Keeling: asked the Secretary of State for Foreign Affairs whether he is aware that inspectors and sergeants of


the Shanghai Police Force, who were asked by the British Government to remain at their posts during the first two years of the war and were, in consequence, imprisoned by the Japanese, have since come to England at the invitation of the Government, with a view to employment in a police force at home or abroad, but have been refused such employment; and whether further efforts will be made to find police work for them.

Mr. McNeil: In view of the advice given to these men to stay at their posts after the outbreak of war in 1939 and the circumstances in which they lost their employment, my right hon. Friend has interested himself in helping them to obtain employment. They were not invited to come to this country but were informed of certain possibilities of employment should they do so. In fact, out of approximately 140 members of the former Shanghai Municipal Police Force, about 50 have now obtained posts, and vacancies for a similar number have been brought to the notice of those concerned. Efforts will continue to be made, in consultation with other interested Government Departments, to assist these men.

Mr. Keeling: Has the Under-Secretary considered the case I sent him, of an experienced police inspector of 42 to whom the only job offered was that of a night watchman? Cannot the Government, who admit they have responsibility in this matter, do better than that?

Mr. McNeil: Naturally I considered the case, as I do every case sent by hon. Members. I am afraid the hon. Gentleman has not his facts accurately in mind. In fact, this applicant was over age for the home force and he was offered a temporary post in the Middle East. For reasons perfectly acceptable to himself he refused that post.

Ex-Internees (Payment of Debts)

93. Mr. William Teeling: asked the Secretary of State for Foreign Affairs why British subjects, interned in Shanghai during the Japanese occupation, and whose sole means of livelihood was lost at that time, are required by the British Government to pay back to them any debts incurred for their upkeep; and whether he will consider making Japan pay these sums instead.

Mr. McNeil: The Japanese authorities bore the cost of maintenance for the internees, although, I am sorry to say, at a pitiful level. To supplement this low standard, His Majesty's Government arranged for the supply of extra comforts by the International Red Cross Society, for the payment of pocket money, and the provision of medical treatment and the like by the Protecting Power. For all of this His Majesty's Government have claimed repayment from each of the internees at the rate of only £2 a month, a small fraction of the cost. Even these claims for repayment are not pressed if hardship would result, but it must be borne in mind that many of the internees were employees of substantial British firms and continued to draw salaries throughout their internment. Such persons are usually only too glad to pay.

Mr. Teeling: While fully realising that that is the case of the employees of large companies—I understand some have paid —may I ask if the hon. Gentleman is aware that there were many Government employees, and people of that kind, who really have not got the money and are now practically starving?

Mr. McNeil: I have already pointed out, and I will repeat it, that I will be glad to consider any individual case where there is undue hardship. The Treasury have not been at all adamant.

Mr. Gammans: What is the justification for treating these people less generously than British subjects were treated in, say, Singapore or any British Colony, in view of the fact that it was very largely as a result of these people's work that a vast amount of wealth came to this country before the war?

Mr. McNeil: I do not accept that there is less generous treatment. In fact, no actual bill has been rendered. There was a token payment in cases where possible, for additional comforts other than supplementary rations.

Mr. Teeling: Could not the Japanese Government be forced to pay out instead of us now?

Mr. McNeil: His Majesty's Government have not lost sight of that possibility. That is being pursued. Of course, that would not necessarily affect the accounts between these individuals and His Majesty's Government.

Oral Answers to Questions — PASSPORT APPLICATION FORMS

94. Mr. Teeling: asked the Secretary of State for Foreign Affairs whether he will consider making the necessary forms for application for a passport available, like many Inland Revenue forms, at the principal post offices throughout the country, and of opening the Passport Office from 8 a.m. to 6 p.m. during the summer months to give workers a chance to apply in person for their passports.

Mr. McNeil: My right hon. Friend does not feel justified in asking the Postmaster-General to impose this additional burden upon the already overworked staffs of post offices. Passport application forms, however, can be obtained from the principal travel agencies and their branches, as well as at the three passport offices. As regards the second part of the Question, I regret that it is not possible, owing to lack of trained staff, to arrange for the Passport Office to be open to the general public from 8 a.m. to 6 p.m. The hours at present are 9.30 a.m. to 5 p.m., Saturdays 9.30 to 1 p.m. Officials are in attendance both before and after these times. A small staff attend on Saturday afternoons and Sunday mornings to deal with urgent cases.

Mr. Teeling: With regard to the second part of the Question, the number of people actually employed are, I believe, something like only three or four in the office downstairs. Would it not be possible, without any very great training, to get a few extra people for those early hours to help the people who want to get abroad?

Mr. McNeil: My information is that it does require considerable training; that it would he no help, and might rather clog up the machine to introduce unskilled people.

Mr. W. J. Brown: Is it not the case that, anticipating the great demand for passports this year, the hon. Gentleman's Department did apply to the Treasury a month ago for permission to train more staff for this work, and that that was turned down by the Treasury, which is part of the reason for the existing delay? Will he tell us what steps he is now proposing to take to enable citizens to get passports?

Mr. McNeil: I cannot pretend that I am not uneasy about this. Of course,

as my hon. Friend knows from previous statements which have been made in this House on this subject, considerable measures have been taken.

Mr. Nicholson: Does not the hon. Gentleman agree with the description of the Passport Office as "disgraceful and unworthy of the British Government "?

Mr. McNeil: I should prefer to be economical and say it was overcrowded.

Mr. Norman Smith: What is the objection to abolishing passports altogether?

Mr. McNeil: There are a great many, and there are just as many Governments concerned as there are objections.

Mr, James Glanville: Does the Minister anticipate a large demand for passports from the working class of this country?

Oral Answers to Questions — POLISH ELECTIONS (CONSULTATIONS)

95. Mr. John McKay: asked the Secretary of State for Foreign Affairs what consultations he has had with the U.S.A. as to how, by their united efforts, they could influence the speedy implementation of free elections, in Poland so that the agreement signed at Yalta by the then Prime Minister, Mr. Roosevelt and M. Stalin, will be honoured.

Mr. McNeil: I can assure my hon. Friend that there has been a full and constant exchange of information between His Majesty's Government and the United States Government on this question.

Mr. McKay: Could the hon. Gentleman tell us what the results of those consultations are?

Mr. McNeil: There have been some results, and they arise in the answer I propose to give later.

Vice-Admiral Taylor: Is the hon. Gentleman aware that the Polish Provisional Government have done everything possible to prevent these free elections taking place; and how does he propose to make them do so? Will he not consider refusing to continue to recognise Fascism?

Mr. Sydney Silverman: Is it not perfectly clear from recent events that the state of public order in Poland does not warrant the holding of any elections? Can I have an answer?

Mr. McNeil: I think it would be only reasonable if I asked for a little time to consider the answer.

Professor Savory: There have been deliberate disturbances.

Mr. Silverman: By the hon. Member's friends.

Professor Savory: No, by those of the hon. Member opposite.

Oral Answers to Questions — TANK PRODUCTION (WHITE PAPER)

The Lord President of the Council (Mr. Herbert Morrison): The House may like to know of the publication today of a White Paper on wartime tank production, Cmd. Paper 6865. The White Paper reproduces the two secret reports on tanks made by the Select Committee on National Expenditure, together with the replies which were made to them by the Government of the day. It will be available at the Vote Office at about 4 p.m.

Sir T. Moore: Is the right hon. Gentleman aware what a relief to the House that announcement will be?

Mr. H. Morrison: I am always glad to give the House an opportunity for relief.

ANGLO-AMERICAN LOAN AGREEMENT (GOVERNMENT PLANS)

The Chancellor of the Exchequer (Mr. Dalton): The House will, I am sure, share the satisfaction of His Majesty's Government that the United States Congress has approved the Loan Agreement. [HON. MEMBERS: "No."] If the Loan had not been forthcoming we should have had to face a serious increase in the austerity which we have endured so long. But now, though we shall still have to do without many imports which we should be very glad to have, we can confirm the plans we have already made for some much-needed expansion of supplies from abroad. We shall be able to authorise my right hon. Friend the Minister of Food to purchase foodstuffs which, if they can be obtained, will provide us with a more varied diet. We shall also be able to carry out our intention to arrange for more plentiful supplies of raw materials, and a limited increase in imports of manu-

factured goods and, we hope, of newsprint. My right hon. Friend the Minister of Fuel and Power will make a statement on petrol in the course of a few days. We must keep a balance between the various demands upon us, since we cannot yet afford to buy all that we would like. To use a famous phrase, the Loan must be, for us, not a sofa but a springboard. We cannot relax our efforts in production, especially in the export trades. As soon as we can we must balance our overseas account. The value of the Loan is that it gives us a breathing space and new reserves of strength to accomplish this task. For this we sincerely thank the United States, believing that they and we have a common interest in reviving trade throughout the world, and providing good standards of living for men and women everywhere.

Mr. Oliver Stanley: I think that everyone in the House, whether they were in favour of or opposed to this Loan, must be glad that the long drawn out debate; have come to an end. On behalf of those who, like myself, believe that but for the loan this country might well have faced economic chaos, may I say how glad we are that it has come, and how glad we are to hear the right hon. Gentleman repeat the phrase of my right hon. Friend the Member for Woodford (Mr. Churchill) about its being a sofa and not a springboard. [Laughter.] I have got it the wrong way round. Watching right hon. Gentlemen reclining on the Front Bench certainly put me more in mind of a sofa than of a springboard. May I ask the right hon. Gentleman two questions arising out of this: first, does he now propose to undertake, with the various countries, negotiations with regard to the sterling balances, and second, what is the position now with regard to the international negotiations on commercial agreements which were proposed?

Mr. Dalton: I am much obliged to the right hon. Gentleman for what he has said. With regard to the sterling balance arrangements, as the House is aware and as is clearly set out in the Agreement—of which, for the sake of verification, I have a copy with me in Cmd. Paper 6708—we have agreed that we will now undertake discussions with the holders of sterling balances, and that of course we shall do. With regard to the international arrangements, my right hon. Friend the President


of the Board of Trade has explained to the House on previous occasions that it will be a natural consequence of the Loan Agreement that conferences will be held on the conditions which have often been explained. The full conference will be preceded by a meeting of the so-called nuclear. Powers, which include not only ourselves but the other members of the Commonwealth. All that programme will now proceed.

Mr. Boothby: Arising out of the Chancellor's last answer, does that mean that pending this conference, all international negotiations on commercial agreements between this country and other countries will be held up?

Mr. Dalton: It is not His Majesty's Government's policy to hold things up, but to press them forward. I am not very clear what is meant. Perhaps the hon. Gentleman, when he has got over the shock of the announcement, would like to put a considered Question on the Paper.

Mr. Boothby: I was referring to matters such as Canadian wheat and Danish food.

Mr. Norman Smith: Are we to take that statement at its face value so far as it concerns the order of priority in which my right hon. Friend enumerated the prospective benefits of this Loan? Are we to assume from what my right hon. Friend said that the variegation of our diet Is first, being followed by access to raw materials and then, as I understand it, manufactured goods and, finally, petrol? Since we must get into debt to the country across the Atlantic, would it not be better that first priority should be given to coal-mining machinery and machinery for the textiles mills, productive machinery? Had not that better come first? Will my right hon. Friend call a conference of the Dominions to see where they come in under this sacrifice? After all, the Loan is responsible —

Mr. Speaker: It is Question time, not speech time.

Mr. Clement Davies: May I join in expressing satisfaction that, at last, this controversy has been terminated. May I also ask the Chancellor this question? There were three matters before us, Bretton Woods, the Loan, and the International Conference. To some of us the third is far

and away more important than the others. What steps are the Government taking to urge forward the summoning of that Conference, which seems to be most vital for the world's general trade?

Mr. Dalton: The programme of this Conference has once or twice been postponed owing to the delays in Congress. I do not complain about them at all, but they have necessitated a postponement of the date. As to the date, it will be a matter for further discussion between His Majesty's Government, the United States Government, and the other Governments primarily concerned, particularly those in what I have described as the nuclear group. We have no desire to delay it unduly.

Mr. Scollan: I would like to ask the Chancellor what proportion do you think that you will lose of this Loan due to the removal of controls of prices in the United States? Do you know that it is estimated that you are likely to lose £50 million?

Mr. Speaker: I do not know anything about it.

Mr. Scollan: I want an answer to my question.

Mr. Speaker: The hon. Member addressed his question to me.

Mr. Scollan: No, Mr. Speaker, I addressed my question to the Chancellor.

Mr. Dalton: Calculations on the subject vary according to the calculator and according to the day of the week. Prices move about very rapidly, and I would prefer not to give an exact answer.

Mr. De la Bére: The right hon. Gentleman does not know anything about any of these things.

Mr. Gammans: May I put to the Chancellor a question arising out of what the hon. Member for South Nottingham (Mr. N. Smith) said? In view of the lush hopes he has held out for more clothes, more food, and more petrol, will he say whether this money is to be spent primarily on consumer goods, or the capital rehabilitation of this country? Surely, the only justification for this Loan, and the only hope of paying it back, is that we should spend it on capital equipment, and not, primarily, on consumer goods?

Mr. Dalton: If my answer is carefully read, it will be seen that, among the objects on which I have just announced a certain easement in the import programme, one of the classes is certainly machinery. It has never been contemplated that the British people, were this Loan granted, should continue in the present state of austerity with regard to consumer goods; and, indeed, that would not promote their efficiency in the regaining of our trade balance as soon as possible. If the hon. Gentleman does not want any fruit, there are plenty of other people who do.

Mr. Blackburn: Will the right hon. Gentleman agree to guard very closely against the use of this Loan, for which we are paying so heavy a price, for luxuries for the well-to-do, such as the total abolition of petrol rationing, which an hon. Gentleman opposite has suggested?

Mr. Henry Strauss: Who are the nuclear group? Is there any danger of nuclear fission?

Mr. Dalton: None at the moment.

Colonel Crosthwaite-Eyre: Can the right hon. Gentleman give any assurance that any action taken by His Majesty's Government in settling the sterling balances, will first be brought before this House, before any action is actually taken by the Government?

Mr. Dalton: No, Sir, I will give no such undertaking. Any arrangement made by His Majesty's Government with any other Governments in the Dominions or elsewhere will be submitted to this House, if desired, after it has been taken, for ratification.

Mr. Cobb: Will the right hon. Gentleman pay particular attention to the expenditure of dollars on American goods also in production in this country? He will surely take the view that we want to be sparing on expenditure on goods we are producing here.

Mr. Dalton: We must be very careful all along the line, here and elsewhere.

Mr. Drayson: The right hon. Gentleman has said he will authorise the Minister of Food to purchase extra food in the United States. Will he also authorise the Minis-

ter of Agriculture to purchase feeding stuffs, so that we can convert them in this country into food for human consumption?

Mr. Dalton: If there should be feeding stuffs available, that would certainly come within the field of increased purchases that we would examine sympathetically.

Mr. Medlicott: Is the right hon. Gentleman aware that many of us feel that it would not be out of place if we were to express our appreciation and gratitude for what is, after all, a friendly gesture from our late Ally?

Mr. Dalton: I wholly agree; and in my statement I said that we do sincerely thank our American Ally in the war, hoping that we and they, and all those others who fought together against the grim menace that confronted us, will continue united in peace.

Mr. Beverley Baxter: As one of the many Conservatives who think that this Loan may be the prelude to disaster, may I ask in what period the Chancellor expects to go into a huddle for the elimination of Imperial preferences, and the sell-out of the Empire?

Sir Stanley Reed: Will the right hon. Gentleman accept the assurance that there is quite a considerable element in this country who will gladly accept the present, and even future, austerities rather than see this heavy burden borne without a proportionate improvement in our productive power, and a reduction in our sterling obligations?

Mr. Speaker: We do not seem to be getting much further now.

BREAD RATIONING (CHILDREN)

The Minister of Food (Mr. Strachey): The Government have given careful consideration to representations which have been made to us in regard to the scales of bread rationing, particularly in regard to the housewife. There is no doubt that the housewife with a family of children has a special need for assistance. The supply position, after careful review, permits us to make a small concession, and we have come to the conclusion that the best way of helping the most hard pressed housewives is to give the extra bread, not directly to them, but to their children. I


want to help the housewife who has the care of a family on her shoulders, and the bigger the family, the more she needs help.
We are, therefore, increasing the scale of allowances to all children from birth to the age of 18 by one ounce a day. We are also reducing the age at which the children's ration will rise from five ounces to nine ounces from 5 to 4 years. We are also, partly for simplicity, abolishing the category of children of under one year, so that the ration from birth to four years will now be five ounces, instead of two ounces for children under one year. These increases for children will reduce the estimated saving of the rationing scheme from 10 per cent. to seven per cent. In order to give effect to them, the value of Coupon F will be increased from 1 to 2 bread units, and Coupon J from 5 to 6 units.

Mr. W. J. Brown: Can the Minister of Food tell us what will be the effect of the very welcome relief he has just announced, coupled with the other reliefs that have been announced to the Press, on the total original saving which, we were told, is desirable, and is estimated to be between five per cent, and 10 per cent.? [Interruption.] The right hon. Gentleman announced the effect of the increased rations for children. I was asking, and I thought I was quite clear, what is the effect of that, coupled with other allowances that have been announced through other channels, on the total saving we are setting out to achieve.

Mr. Strachey: The former announcements which, I think, the hon. Member has in mind, were all in the original scheme. Some of them were not understood, and were not, indeed, covered in detail by the original announcement; but they were all allowed for in the original estimate, and the only change in the estimated saving is the one I have just announced, from in per cent. to seven per cent.

Sir T. Moore: On a point of Order. In view of the fact that, in regard to the question of the American Loan, we took two days only to put it through this House, and that it has taken nearly six months to put it through Congress, would it not be in Order to have some fuller questioning of the Minister as to its effects?

Mr. Speaker: I called upon the right hon. Gentleman the Minister of Food.

Mr. R. S. Hudson: Speaking from memory, my recollection is that the saving suggested, originally, was of the order of between five per cent. and 10 per cent. I understand, if my arithmetic is correct, that this present concession which, I am sure, is widely welcomed, will reduce the saving by three per cent,, that is, from 10 per cent. to seven per cent. In other words, if the original statement is correct, the present saving is between two per cent. and seven per cent., and not between five per cent. and 10 per cent. May I ask when the Order will be issued?

Mr. Strachey: On the first point, no one can, of course, give an exact estimate to within one per cent. of the saving; but I think we have been extremely conservative in our estimate of the saving that would be effected. I should very much doubt whether this, in fact, will reduce the real saving by as much as three per cent., because I think that the families to whom we are giving the increase by this concession would be the very ones who, otherwise, would have sacrificed points for bread units, and would have got extra bread in that way, by sacrificing points. Therefore, I doubt very much whether the loss in broad will be as much as three per cent. On the second point, the Order is being printed, and I trust and believe it will be laid this afternoon.

Mr. Boyd-Carpenter: The right hon. Gentleman said that under his present concession the bread ration for children from the age of four years would be nine ounces. In view of the fact that the published scale of rations for the five to II years of age group was eight ounces, will he clear up the disparity?

Mr. Strachey: Yes, Sir—because I have just announced an addition of one ounce for all children.

Sir William Darling: In view of the very important statement made a little earlier by the Chancellor of the Exchequer, I should like to ask the Minister of Food whether the situation has not greatly changed; and if it is too late for him to consider putting the people of this country on their honour for two months of voluntary rationing?

Mr. Speaker: There is, I am sorry to say, a sad tendency in the House to try to debate matters by question and


answer. That seems to me to be purely a debating point and not a question.

Sir W. Darling: If I was too obscure, may I put the definite question? Is it too late to reconsider voluntary rationing for two months in the light of the statement made by the Chancellor of the Exchequer?

Mr. Strachey: I am sorry to say that so far as cereal supplies are concerned ratification of the Loan can have no direct or, I should say, indirect effect whatever. The Chancellor of the Exchequer has never grudged dollars for the purchase of every single ton of cereals we can possibly get.

Mr. John Paton: Will the Minister assist the House by converting the figure of 7 per cent. into approximate tonnages?

Mr. Strachey: I am afraid 'that that is beyond my powers of arithmetic, but I should say that the figure is somewhere in the neighbourhood of between 300,000 and 400,000 tons.

Sir T. Moore: As I assume that we have now disposed of the Minister of Food, can I ask the Chancellor whether, in view of the fact that this Loan which we are getting from America has depreciated by £100,000, the Agreement still stands?

Mr. Speaker: Captain Crookshank.

QUESTION OF PRIVILEGE

Captain Crookshank: With your permission, Mr. Speaker, I should like to ask for your guidance on what may or may not be a matter of Privilege, but which at any rate has troubled some hon. Members, including myself. I have received a letter, and I think many other, if not all, hon. Members, and possibly you, Mr. Speaker, have received similar letters, from an organisation which I must admit I had never heard of, called Service Equity. It is a printed document, and it is not signed, although the name of the secretary is shown at the bottom as F. R. Muddle—there is nothing to show whether it is a Mr., Mrs., or Miss. The letter, with which I need not trouble you, Mr. Speaker, deals with some service organisation. It is the last sentence which, in this connection, is of importance, and I will read it to the House:

 In the event of no reply, we shall be forced to assume that the Member of Parliament concerned is against us.
I do not know what would be the effect of the assumption that a Member of Parliament was or was not against this organisation, but it does seem to me to imply some sort of threat in the case of no reply being given. I do not think that any Member, except as a matter of courtesy, is under any obligation to answer any letter unless he or she so desires. I wonder, therefore, Mr. Speaker, if you would be good enough to give us a Ruling on a matter of this kind in protection of hon. Members of this honourable House?

The Lord President of the Council (Mr. Herbert Morrison): Like the right hon. and gallant Gentleman the Member for Gainsborough (Captain Crookshank) I would not dogmatise on whether any point of Privilege arises, but I do sympathise, and I am sure my hon. Friends sympathise, with what he has said. If Members of Parliament get communications from organisations of any character, it seems to me that they are free to agree or disagree with the organisation, or send a reply which is not clearly "Yes" or "No"—from time to time it is quite right that they should send no reply at all. The implied threat in this letter, of a sort of blackballing arrangement if a Member does not reply, does seem to me to be an effort to coerce the free judgment of Members of this House. Therefore, although I am not sure that any question of Privilege arises, I sympathise with what the right hon. and gallant Gentleman has said and would affirm that so far as the Government are concerned, Members of this House must be absolutely free to answer communications as they like, or not to answer them at all.

Mr. Walkden: Is there not a famous Mr. Muddle of music-hall fame; and might not this be a fictitious Muddle such as we know on the B.B.C.?

Sir Ian Fraser: Are we not bringing up rather big guns in invoking Privilege over so trivial a matter; and in any event is there not good warrant for the view that "he who is not with us is against us?"

Mr. Speaker: I will read out one line from Erskine May:
To attempt to influence Members in free debate by threats is also a breach of Privilege.


I think that is perfectly clear. I cannot say that this letter appears to contain a prima facie breach of Privilege. It is quite true that it is worded in such a way as to insinuate what I might call a veiled threat. In tone it is disrespectful to Parliament. I think that a repetition of such a letter might justifiably incur the serious displeasure of the House. As it contains no very definite threat, I suggest that we had better treat it as undeserving of consideration.

Mr. W. J. Brown: In view of the fact that Erskine May lays it down that it is improper to influence by threats Members of Parliament in their conduct, may we assume that the doings of Party Whips in this House are equally out of Order?

Mr. Speaker: The hon. Member speaks as an Independent, and I do not know what his Party Whips try to do.

Orders of the Day — FINANCE (No. 2) BILL

As amended, considered.

NEW CLAUSE.—(Rebate on light oils used in refineries for producing gas.)

Where by virtue of Subsection (2) of Section eight of the Finance (No. 2) Act, 1945, customs duty is charged on light oils used in a refinery for producing gas the same rebate shall be allowed in respect thereof as would be allowable if those oils were not light oils.—[Mr. Dalton.]

Brought up, and read the First time.

4.0 p.m.

The Chancellor of the Exchequer (Mr. Dalton): I beg to move, "That the Clause be read a Second time."
We are now entering on the Report stage of the Finance Bill, and there are several new Clauses calling for the attention of the House. I venture to express the hope, that in order that we may get a reasonable amount of sleep this week, we might, where there is really nothing much to debate in a Clause, allow it to pass fairly quickly. Many of these new Clauses, of which this is an example, have been put down by me following discussions in Committee, and in response to representations made from Members in different parts of the House. If we are to keep our attention in the time at our disposal focused on the things that matter, I suggest, with great respect, that we might pass rather quickly over such new Clauses as this one which has been put down in respect of the very clear speech made in Committee by the hon. Member for Weston-super-Mare (Mr. Orr-Ewing). This carries out, I think, the undertaking for which he asked. The purpose of the Clause is to substitute for the present Duty, in respect of oils used in refineries to produce gases for heat, light and power outside the refineries, a flat rate of 1d. per gallon whether the oils used are heavy oils or light oils. I hope that he will agree that this gives what he wanted.

Mr. Orr-Ewing: While thanking the Chancellor of the Exchequer for introducing this new Clause, which, as he states, carries out the intentions which were put forward by us during


the Committee stage, I should like to ask whether the words here used do carry out exactly what the right hon. Gentleman has just stated. The words standing on the Order Paper do not appear quite to cover the point. I assume that, obviously, that has been examined, but the right hon. Gentleman's words are not quite clear.

Mr. Dalton: We have considered the matter very carefully, and my legal advisers informed me that this form of words is best adapted to carry out what the hon. Gentleman requires.

Question put, and agreed to.

Clause read a Second time, and added to the Bill.

NEW CLAUSE.—(Allowance for artificial silk used in tyres.)

Where it is shown to the satisfaction of the Commissioners that any yarn or tissue, containing artificial silk on which a duty of customs or excise has been paid, has been used in the manufacture of tyres, and that the manufacture of those tyres was completed on or after the first day of October, nineteen hundred and forty-six, they shall, subject to such conditions as they may impose for the protection of the revenue, pay to the manufacturer of those tyres out of the sums received by them on account of duties of customs and excise, an allowance of sixpence on every pound weight of such quantity of artificial silk on which a duty of customs or excise has been paid as is, in the opinion of the Commissioners, contained in the yarn or tissue so used.—[Mr. Dalton.]

Brought up, and read the First time.

Mr. Dalton: I beg to move, "That the Clause be read a Second time."
This new Clause is also a concession, following upon discussions in Committee, with regard to rayon. The purpose of this Clause is to give assistance to the rayon industry particularly in regard to artificial silk used in the manufacture of tyres. The new Clause, as I have put it down, goes a little further than I indicated at the earlier stage. The new Clause gives a rebate on the Excise Duty of 6d. per pound on artificial silk which is to be used not only in motor tyres but tyres of all kinds. This leaves it open for some rebate to be given in connection with tyres for aeroplanes or tyres for bicycles. I gather that there is a possibility of such a development, and we are anxious to assist. I hope that the House will agree that this is a reasonable degree of help to be given, at this stage, to the rayon industry.

Question put, and agreed to.

Clause read a Second time, and added to the Bill.

NEW CLAUSE.—(Assessment for penultimate year of trades discontinued in consequence of nationalisation schemes.)

Where, by any Act passed after the beginning of the present Session which embodies any scheme for the carrying on of any industry or part of an industry, or of any undertaking, under national ownership or control, provision is made for the transfer of any property, constituting the assets of a trade, as part of the initial putting into force of the scheme, to the Crown or to a body corporate constituted for the purposes of that scheme or any previous scheme for such national ownership or control as aforesaid and, in consequence of the transfer, the trade is permanently discontinued in 1946–47 or any subsequent year of assessment, no additional assessment shall be made under paragraph (b) of Subsection (1) of Section thirty-one of the Finance Act, 1926, in consequence of that discontinuance for the year preceding the year of assessment in which that discontinuance occurs.—[The Solicitor-General.]

Brought up, and read the First time.

The Solicitor-General (Major Sir Frank Soskice): I beg to move, "That the Clause be read a Second time."
This also represents a concession to arguments adduced in Committee by hon. Members opposite, in particular by the hon. Member for Twickenham (Mr. Keeling). Under the Finance Act, 1926, Section 31 (b), where a trade is discontinued, it is taxed in relation to the penultimate year, either upon the takings of the previous year or of that year, whichever is the higher. In a case where an undertaking is nationalised, it was represented by the hon. Member for Twickenham that it would not be fair to impose that upon an undertaking, which, after all, is not nationalised by its own will. In those circumstances, in the case of undertakings which are nationlised compulsorily, the provisions of the Finance Act, 1926, Section 31 (b), are by this new Clause excluded. That means, that supposing an undertaking is discontinued in year three, apart from this Clause, even if it were discontinued owing to nationalisation, in year two, it would be assessed to Schedule D either on the takings of year one or on the takings of year two, whichever is the higher. The effect of this Clause is that where an undertaking is nationalised, it will now


not be assessed under Schedule D in respect of year two on the takings of year two, but always on the takings of the preceding year, even though the takings of year two may be higher than the takings of the preceding year. It represents a concession to assist industry to get on its feet again. It is a concession which was asked for, and it meets an undertaking given by the Chancellor of the Exchequer on the Committee stage. I ask the House to say that this is a concession of which they approve.

Mr. Keeling: May I ask the learned Solicitor-General two questions which are, in fact, explained by the Amendment to the proposed new Clause in the name of my hon. Friend the Member for Stockport (Sir A. Gridley)—in line 8, after "discontinued," insert:
or is deemed to be discontinued in whole or in part
—which. I understand, will not be called? When the mining industry, for example, is nationalised, the business carried on by a colliery company will probably not be discontinued, but will be continued under the new owners of the colliery. Will it be deemed to be discontinued within the meaning of the rules contained in Schedule D of the Income Tax Acts, 1918? The second question is this: The colliery company, or any company which is nationalised, may be carrying on more than one activity, and, under nationalisation, it may lose only part of its business. What would be the position then? Will it be covered by the new Clause?

The Solicitor-General: The answer to the first question is that the effect of the Finance Act, 1926, Section 32, is that, in the circumstances indicated, the undertaking would be deemed to have come to an end. The answer to the second question is that, where two undertakings were carried on, one being a colliery undertaking and the other being a different undertaking which did not fall within the scope of the nationalisation scheme, the owners would be assessed separately in relation to each of the undertakings, that is to say, under the terms of this Clause, in respect of the colliery undertaking, and in respect of the other undertaking under the terms of the Finance Act, 1926, Section 31 (b), as it at present stands. It raises a question of fact, in each case, as to whether there are two undertakings or

whether they are in substance the same undertaking. Where there are two undertakings, that would apply, and an assurance has already been given by the Board of Inland Revenue that that rule would be strictly observed.

Question put, and agreed to.

Clause read a Second time, and added to the Bill.

NEW CLAUSE.—(Increase of balancing allowances under Part I of Income Tax Act, 1945.)

(1) Subject to the provisions of this Section, so much of the provisions of Subsection (4) of Section three of the Income Tax Act, 1945, as requires that balancing allowances to be made in the events mentioned in Subsection (I) of that Section (being sales of and other events relating to industrial buildings and structures) shall, in the cases mentioned in the said Subsection (4), be reduced by applying a certain fraction, shall not have effect.

(2) Where any person by notice in writing to the surveyor elects that Subsection (1) of this Section shall not have effect in relation to any of the said events, he shall, in relation to that event, be treated for all the purposes of the Income Tax Acts as he would have been treated apart from the provisions of Subsection (1) of this Section.—[Mr. Dalton.]

Brought up, and read the First time.

Mr. Dalton: I beg to move, "That the Clause be read a Second time."
This Clause is one on which my right hon. Friend the Member for the Scottish Universities (Sir J. Anderson), my predecessor in Office, made representations to me. At present there is a restriction imposed by the Income Tax Act of 1945 upon the so called balancing allowances that may be given in cases where industrial buildings are scrapped. At present, so the argument runs—and I have accepted the argument because it is conclusive—the balancing allowances under these restrictions—I hope I shall be able to make this clear because it is complicated—fall short of the aggregate amount of the allowances which a trader would receive in respect of his building if he retained it. Consequently, the restrictions act as a deterrent to scrapping old buildings and replacing them with new. This was the point brought to my attention with great clarity by my predecessor. In view of this, and since it is far from being our wish, that we should encourage the patching up of old buildings, It has been decided to add this New Clause, which lays down that the industrialist who scraps


an old building and replaces it by a new one will receive by way of a balancing allowance, an amount equal to the amount he would have received if he had kept it, minus any money he receives for the amount of the scrapping. This is a complicated story but we are seeking by this provision to remove the discrimination, which I think does exist under the present law referring to balancing allowances, and which does discourage the replacement of old buildings by new. We hope if this Clause is accepted that it will be a stimulus to the modernisation of industrial buildings.

Sir Arnold Gridley: There is one point on which we are still a little doubtful. It has been raised by the pottery industry working party. Apparently this Clause does not go to the full extent to which that working party asked that it should. As I understand, in their report the working party asked that there should be no writing down at 2 per cent. on old buildings for the year when, in fact, the two per cent. was not an effective allowance. In the new Clause the Chancellor does not meet that point.

The Solicitor-General: The Clause as drafted, quite frankly, does not go to the full extent of the request which was made by the pottery working party. That request would, in point of fact, extend to a length to which the Chancellor of the Exchequer feels he cannot go. It would mean that the balancing allowance would be calculated by reference to the whole life of the building concerned which fell before the appointed day and after the appointed day. That is a concession which, in the view of my right hon. Friend would be quite unjustifiable, and, therefore, he feels he is not in a position to accept it.

Question put, and agreed to.

Clause read a Second time, and added to the Bill.

NEW CLAUSE.—(Replacement of buildings provided before 1937.)

(1) Subject to the provisions of this Section, if any person who carries on a trade or business makes a claim for relief under this Section and proves—

(a) that a building provided by him for the purposes of the trade or business before the beginning of the year nineteen hundred and thirty-seven was sold or demolished on or after the first day of April, nineteen hundred and forty-five, and that a building containing similar or improved accommodation

has, since the said first day of April, been constructed by way of replacement and used by him for the said purposes; and
(b) that, if, in lieu of that sale or demolition, repairs to the building sold or demolished had been carried out, expenditure thereon would have constituted costs of deferred repairs,

he shall be entitled to require that he be treated, for the purposes of Excess Profits Tax, as having, as and when expenditure is incurred by him on the construction of the building provided by way of replacement, incurred costs of deferred repairs up to the amount specified in Subsection (2) of this Secton, and Section thirty-three of this Act shall, where appropriate, and subject to any necessary adaptations, apply accordingly.

(2) The said amount is an amount equal to—

(a) so much of the expenditure which, if repairs to the building sold or demolished had been carried out immediately before the sale or demolition, would have been incurred on those repairs as would have constituted terminal expenses; or
(b) the net cost of the building provided by way of replacement,
whichever is the less.

(3) Where relief is given by virtue of this Section, then, for the purposes of paragraph 3 of Part I of the Seventh Schedule to the Finance (No. 2) Act, 1939, and of Section fifteen of the Finance Act, 1937, as applied for the purposes of Excess Profits Tax (being provisions which relate to exceptional depreciation allowances and depreciation allowances for mills, factories, etc.) and as respects all periods whether before or after the passing of this Act, the net cost or actual cost to the person carrying on the trade or business, as the case may be, of the building provided by way of replacement shall be treated as reduced by the amount mentioned in Subsection (2) of this Section.

(4) Where Section thirty-three of this Act applies by virtue of this Section and the person entitled to claim under that Section is the principal company of a group of companies, a claim under this Section shall be made by, and only by, that company.

(5) In this Section the expression "costs of deferred repairs" has the same meaning as in Section thirty-three of this Act, and the expression "net cost" has the meaning assigned to it by sub-paragraph (3) of paragraph 3 of Part I of the Seventh Schedule to the Finance (No. 2) Act, 1939.—[The Solicitor-General.]

Brought up, and read the First time.

4.15 p.m.

The Solicitor-General: I beg to move, "That the Clause be read a Second time."
This Clause, too, is one of some complexity. It also represents a concession by the Chancellor of the Exchequer to arguments which were adduced from the opposite side in Committee, particularly


in the form of an Amendment put down by the hon. Member for Stockport (Sir A. Gridley). Briefly, what he proposed was that, in the case of deferment of repairs, if it were more expedient on the whole, instead of carrying our repairs, to scrap the building, machinery or plant which required repair, the person who was the owner of the building, machinery or plant in question could scrap the building, machinery or plant an claim as an allowance the amount to which he would have been entitled by way of deferment repairs had he carried them out. That is what was proposed in the Amendment. I opposed that Amendment and gave various reasons for that attitude. The main reason was that already, by virtue of the provisions of paragraph 3 of the Seventh Schedule of the Financial (No. 2) Act. 1939 and certain other provisions, virtually the same concession was already granted by the law as it stood. I did, however, point out that neither that Schedule nor any other provision of Income Tax legislation applied to buildings as distinct from plant and machinery which were acquired before 1937. Paragraph 3 of the Seventh Schedule of the Finance (No. 2) Act, 1939, applied to plant, buildings and machinery acquired after 1937. Similarly, Rules 6 and 7 of Cases 1 and 2, Schedule D of the Income Tax Act of 1918 applied only to plant and machinery and not to buildings whether acquired before or after 1937. The result was there was a gap in existing legislation in so far as buildings acquired before 1937 were concerned.
This Clause is designed to fill that gap in the sense in which it was sought to be dealt with by the Amendment to which I have referred. It does, in other words, provide in respect of buildings acquired before 1937, that if the owner of the buildings, instead of carrying out deferred repairs, scraps the buildings on the ground that that is more economical to do so, he shall be entitled to claim, as an allowance, the amounts which he would have been entitled to claim as deferred repairs allowance, proportionate to the expenditure which he incurred in replacing the building. For example, supposing a man scraps a building and replaces it with a new building at a cost of £100,000. If instead of scrapping that building he had repaired it and was entitled to an allowance of £70,000 he would

still be entitled to that allowance in respect of the expenditure of £100,000. In making this concession my right hon. Friend feels he is giving an added stimulus to industry. He is encouraging industry to scrap obsolete buildings, and he is going a long way to meet the point embodied in the Amendment put down by the hon. Member for Stockport.

Sir A. Gridley: I think the Chancellor has fully met the point I raised, and industry ought to be satisfied with this provision

Question put, and agreed to.

Clause read a Second time, and added to the Bill.

Mr. Speaker: The next new Clause (Amendment of Income Tax Act, 1945, and Finance Act, 1944), standing in the names of the hon. Member for Stockport (Sir A. Gridley) and the hon. Member for Edgbaston (Sir P. Bennett), is out of Order. The following two new Clauses, standing in the names of the same two hon. Gentlemen, can be taken together.

Captain Crookshank: When you say, Mr. Speaker, that these two Clauses may be taken together, does that mean that we can divide on them, if we wish to object to either or both of them?

Mr. Speaker: There is no reason why that should not be done.

NEW CLAUSE.—(Allowance o f rehabilitation costs for profits tax.)

There shall be deducted from the profits for the purposes of the profits tax in the accounting period in which they are incurred any rehabilitation costs as defined in Subsection (5) of Section thirty-three of this Act.—[Sir A. Gridley.]

Brought up, and read the First time.

Sir A. Gridley: I beg to move, "That the Clause be read a Second time."
This Clause, and the following Clause, are in the same form as those which were put down on the Committee stage. They were then debated together, and were then refused on the ground that to put their provisions into effect would be too costly. Rehabilitation costs are allowed by the Bill for Excess Profits Tax, and only some part of these costs will be of a capital nature. The Solicitor-General, in commenting upon these Clauses when they were brought up in Committee, said that the capital cost of alterations to buildings would be written off in 45 years by


the operation of the Income Tax Act, 1945, and that, as regards plant and machinery, the period would be much shorter. I suggest that that argument is correct only so far as Income Tax is concerned, and that it hardly applies with regard to the Excess Profits Tax. That being so, the taxpayer will have to bear the whole cost of capital expenses of rehabilitation without relief from the Excess Profits Tax. Why should this be an expensive concession to make? If it is only part of the rehabilitation costs which is in question, that part which is revenue will, automatically, be allowed for Income Tax, and also for Excess Profits Tax. As the cost of making these special wartime arrangements is allowed for E.P.T. and Income Tax—the latter by way of special depreciation—the cost of undoing this special expenditure should equally be allowed for E.P.T. and Income Tax. I agree that by operation of the Income Tax Act, 1945, the cast of any special building, or alterations thereto, would be written off over 45 years, and in a shorter period in connection with plant, but 45 years is a long time to wait for relief of expenditure which is certainly attributable to the war.
The difference between the expenditure for which the Income Tax Act, 1945, gives an allowance, and the expenditure incurred on rehabilitation costs, is that the former creates an asset which is in use over the period for which the allowances are to be given. The rehabilitation costs are merely the costs of getting rid of an impediment to production, and converting wartime buildings to a peacetime layout. The money is lost as soon as it is spent; there is nothing else that could be depreciated over a period. That is an additional argument which the Solicitor-General did not meet, and I think it is right that we should now come back to further consideration of this matter.

Mr. Benson: I beg to second the Motion.
I hope my hon. and learned Friend the Solicitor-General will accept this Clause, because there is a considerable amount of equity in it. The firm which has rehabilitation expenses will have to bear practically the whole of the capital account itself unless it happens to pay E.P.T., in which case it can set 6 per cent. of its expenses against E.P.T., under Clause 33. The only argument which my hon. and learned Friend used when this matter was previ-

ously discussed, was that this would mean a very costly concession. In saying that, I think that he rather exaggerated. All revenue expenses are already capable of being set against profits, under the ordinary Income Tax law. All firms that pay E.P.T. will be able to set off their capital expenses for E.P.T. to the extent of 66 per cent. That leaves those firms which are not paying E.P.T. to bear the whole of the cost. There is also the additional burden which will fall on the revenue. When you come to add up the additional expenditure it will be 6 per cent. in the case of buildings or 10 per cent. in the case of machinery, in addition to the revenue allowance, the E.P.T. allowance and the initial allowance under the 1945 Act. Taking all these various deductions from the actual cost, it seems to me that the Solicitor-General was exaggerating when he said that a heavy expenditure would be involved. Much of this expenditure was incurred, if not directly under order from the Government—and some of it was, by the concentration of industry—in the national interest. There is, therefore, a strong case for seeing that those firms which do not pay E.P.T. should be put on the same footing as those which do.

4.30 p.m.

Sir Peter Bennett: The Solicitor-General, when this matter was debated on the Committee stage, referred to its being expensive. It seems to me that justice ought not to be measured in that way. I do not think it is right for the Solicitor-General to say, "You have made a very good case, but it cannot be afforded." This is not an ordinary matter of taxation, but one of justice. Secondly, the Solicitor-General said that it is not as unfair as one might think at first sight. My hon. Friend the Member for Stockport (Sir A. Gridley) has already observed that it is hardly sufficient to tell a man that everything will be all right and that things will straighten themselves out in 45 years. I feel that the Solicitor-General did not do himself justice in the arguments he used on that occasion. He promised that, having heard our statements, he would consult with the Chancellor and see whether something better could be done. As I said on the Committee stage, having been a temporary civil servant who persuaded people to do all sorts of things and assured them that they would be dealt


with fairly, I find it very hard that such people should now be able to say, "Had I been a slacker and done nothing, I should have been very much better off than I am now after having obliged you." I feel that we ought to help these people and to see that they are not worse off than those who refused to help us, who got ready for the end of the war, and did nothing else. I hope the Solicitor-General will give further consideration to this matter.

The Solicitor-General: May I refer to the remarks of the hon. Member for Stockport (Sir A. Gridley) about what said during the Committee stage? I would not like to think that I had misled hon. Members, and I did not do so intentionally. If the hon. Member will refer to my speech on that occasion, he will find that I did not say that the Income Tax Act, 1945, applied to the Profits Tax. I referred to the provisions of the Income Tax Acts; I did not intend to include that particular Act, there being a large number of others. The ordinary provisions as to wear and tear and as to revenue deduction do apply. I quite agree with the hon. Member that the Income Tax Act, 1945, does not apply to the Profits Tax.
This point was discussed in Committee and both these new Clauses were on the Order Paper in the same form as they are today, and I hope that the House, and in particular the hon. Member for Stockport, will be satisfied if, on the authority of my right hon. Friend the Chancellor of the Exchequer, I give the following assurance. My right hon. Friend authorises me to say that, without commitment, he will undertake to consider the matter more fully before next year's Finance Bill. I hope the hon. Gentleman will be satisfied with that assurance. The problem is not a simple one. It is a difficult problem, and there is a great deal to be said on both sides of it. After all, it is not easy to justify, from one point of view, singling out rehabilitation expenses, and allowing them for purposes of Income Tax in one lump, when the same is not done with numerous other reconstruction expenses which an undertaking must of necessity incur in order to get back on to its feet. There is a whole range of expenses which are absolutely necessary and which any enterprise that

needs to restart after the war must, of necessity, incur. The new Clause would not cover such expenses, but would single out rehabilitation expenses. I do not disagree with the view that there is possibly a stronger case with regard to rehabilitation expenses than with regard to a great many other expenses, but the matter does require careful consideration. We have had some time for consideration, but we want more time, for the matter requires careful working out. I hope the House will not think that we are considering the matter in an offhand way, or are not taking the suggestion seriously, but we will give it the thought which it deserves, and will go into it much more fully before next year. Of course, I cannot at this stage give any undertaking of any commitment, because I have no authority to do so. With the assurance I have given, I hope that the hon. Member for Stockport will think it right not to press the new Clause.

Mr. David Eccles: Will the Solicitor-General give an estimate of the cost? It is very important, if this matter is to be thought out, that we should have some idea of what it would cost. If it is only a comparatively small sum, I do not think we ought to be satisfied with being put off. I entirely agree with the Solicitor-General that there is a case for saying that rehabilitation expenses, most of which are incurred under directions from the Government, are in a special position. I know there are many other expenses which firms have, such as building up their market research and so on, but rehabilitation expenditure is of a special sort, and after all, firms will be incurring it during the next year, and it would not be very satisfactory if they had to wait for another year. Could the hon. and learned Gentleman tell us something about the cost?

Mr. I. J. Pitman: I would like to thank the Solicitor-General. I quite see the wisdom of deferring this matter until next year and giving the proposal real and proper consideration in that time. It is clearly a most difficult matter, particularly with regard to the line of differentiation between what is really a revenue expense and what is a continuing asset to the company concerned.
There is one argument which I think has not been put, and I think the Solicitor-General would wish to take it


into account in the intervening period. It is the desirability for our companies in this country to have a strong balance sheet and to write off in their accounts anything which does not have a long continuing asset value. We must face the fact that the influence of the Treasury in company finance is very great. It is true that one can quite properly keep, although it may appear paradoxical, two sets of books, one for the benefit of the Inland Revenue and the other, the more conservative one, for one's shareholders; but by and large, the general effect is that if the Inland Revenue say that one must not write off this against profits, the firms do not in fact write it off, and thereby they water or inflate their capital to the extent that the regulations passed by the House make it, in effect, justifiable for them to do so. I hope that, in considering this point, the Solicitor-General will bear in mind the desirability of companies in this country, in competing with firms overseas, being in a strong balance-sheet position and not having inflated assets.

Mr. Osbert Peake: I think we have had a most unsatisfactory reply from the Government on this new Clause. What is the position? It is that rehabilitation costs, which are defined by Clause 33 (5) of the Bill, are properly allowed against an assessment to Excess Profits Tax. These rehabilitation costs consist of three things. First, expenditure on the removal of works designed to afford protection from hostile attack, that is to say, works carried out under duress in the early years of the war in order to protect workers in factories from enemy bombing; second, the removal of a works from one place in the country to another; and, third, the adaptation of works for a different purpose during the war. All the costs properly incurred in carrying out these wartime works are to be allowed against liability to Excess Profits Tax, and all that we on this side have asked is that, that being so and these works having been undertaken under compulsion, the cost of restoring the former position should also be allowed for Income Tax purposes and for the purposes of what was formerly called national defence contribution but is now called the profits tax.
In equity I think the case is clearly made out; in fact I think this was admitted on the Committee stage by the Solicitor-General when he adduced as his

primary argument against accepting the proposal the fact that it would be too expensive for the Government to adopt. We have not heard that argument repeated today, and in point of fact those who know something about this matter realise that from the point of view of cost there will be very little money in this new Clause. What happened on the Committee stage? The Chancellor of the Exchequer was not in the Committee when the proposal was under discussion, but left it to the learned and, I may say, very courteous Solicitor-General to handle this matter. The Chancellor came in after the matter had been pressed for some time and invited us to withdraw the proposal on his undertaking that the matter would be further looked into before the Report stage. I will not bother the House with the exact words that he used but in fact the proposal was, I think, withdrawn upon the Chancellor assuring the Committee that the matter would have further attention. Something like three or four weeks have elapsed since this matter was discussed in the Committee stage. The same proposals are put down again, they are moved from these benches, they are supported in what I thought was a most reasonable and cogent speech by an hon. Member on the Government side, the hon. Member for Chesterfield (Mr. Benson), who knows a great deal about these financial questions, and what is the Government's reply?
No doubt for some good reason the Chancellor again absents himself during the discussion of this important subject. The right hon. Gentleman went out as soon as this new Clause was moved, and what is it that the House is offered by way of consolation from the hon. and learned Solicitor-General? The House is not offered this time the argument that the proposal would be too expensive; that argument has been abandoned. We are not offered arguments against this new Clause on its merits; we are simply told that the Chancellor has authorised the Solicitor-General to give an undertaking to the House to consider this matter more fully before next year's Finance Bill. I say that this is a very unsatisfactory position. The case has been made out in equity and I think the House was convinced of the fairness of these proposals nearly a month ago. There have been three or four weeks at least for this matter to be further con


sidered but all we are told is that the whole thing will remain in the air for another 12 months. In the meantime these rehabilitation costs have to be incurred by many people engaged in industry. Air raid barriers and buffers of all kinds have to be taken down, works have to be moved back from one part of the country to another, wartime adaptations of plants and factories have to be undone—all this work is proceeding yet no one carrying it out will have any certainty at all that at any time will he be allowed to count for the purposes of Income Tax the costs of this work done under duress during the war. I really think that the position is most unsatisfactory and in the circumstances we on this side shall have to press the matter to a Division.

4.45 p.m.

Mr. Charles Williams: I am really amazed at a great many things in connection with this new Clause. The first is that the Chancellor of the Exchequer should seek to absent himself during the discussion of a matter of such great importance as the rehabilitation of the trade and industry of the country. As I understand the position, it is that firms who have had to move during the war from one place to another, or to erect various things for the protection of their plant and machinery for purely war purposes, are encouraged to take down those impediments to their businesses but are not encouraged in any way by means of taxation under this Clause to put the thing right and to place their factory in a position to carry on their businesses.
Imagine what is going to be the effect of this kind of dual purpose project. The various things that hinder business are to be taken away, but nothing is to be done to help firms to get started again. The right hon. Gentleman the Leader of the House goes to a place like Birmingham and tells the business people to get on with it; why does he not come down and help the Chancellor of the Exchequer to encourage them by giving them the relief which is so urgently necessary on this occasion? I think this is the strangest of those many strange examples which we are seeing at the present time. At one minute we have the Solicitor-General—although I do not pretend that he is doing it with any bad intent; he just does not know—discouraging business, while at

another other hon. Members opposite say the reverse. It is a very unfortunate position, and what strikes me also is the very interesting speech which has just been made by the hon. Member for Bath (Mr. I. J. Pitman). He pointed out very clearly, on a subject of which he has very great knowledge indeed, that if, in this matter of accounting, we have a form of taxation of this kind hanging over us at the present time a firm is tempted to do this, that or the other thing. The hon. Member also pointed out that it is a great hindrance to the development of a company to have those burdens hanging over them. I will take it one step further; if the hindrances are being piled up on to the companies in this way, as was put very fairly just now, surely it would be in the interests of the Chancellor to cut his losses at the present time and to know where he is, encouraging these business people to go on, instead of saying, as he has, through the Solicitor-General, that he will think it over during the next year. What would happen if every business in the country behaved like that and said they would think things over and perhaps rebuild or do something of the kind in a year? But of course private enterprise is not so dull and would not do such a thing.
Let me come now to the Solicitor-General's quite interesting speech. I will not say "remarkable" speech because we have heard so many like it recently. In the first place the hon. and learned Gentleman said he could not accept the present proposal because of the cost; now he says he does not know what the costs are. If this House is always to be treated in this way how are we to understand whether this is a big thing or not? We do not know the cost and we have no means of ascertaining it. How can hon. Gentlemen on the other side of the House, in their desire to support the Government on this occasion, argue against trade and business and the employment of labour when they have not the haziest idea of what the cost is—unless they have some secret information which is not available either to the House or the learned Solicitor-General? The Government must have some sort of idea of the cost—I do not ask for anything very definite but they ought to try to meet the point of view of big business.
The hon. and learned Gentleman has told us to wait till next year. The Chancellor has had four or five weeks in which to think over the matter. This is a matter of considerable importance. It must have occurred to the Chancellor over and over again. I cannot imagine the ex-Chancellor of the Exchequer, whom I see on our Front Bench, taking all this time to deal with the matter. Probably he would have done in 24 hours what the Government want one year, one month, and a few odd weeks, to do. This is another illustration of the refusal of the Government to put first things, first. The Government have so messed up their position that they do not know where they are. It is no good telling us to wait until next year, or saying that they do not know the cost. That is not treating the House or the country properly. I believe that the Solicitor-General will be very sorry that he did not do a little more work on this matter and try to find a solution. It is a pity, also, that the Chancellor could not have handled this matter himself and got it settled as he might very well have done.

Lieut.-Commander Gurney Braithwaite: We are not without hope that the arrival of a representative of the usual channels upon the Front Bench opposite may be an omen of some importance, as he has been oscillating between the Front Bench and some of the distinguished representatives under the Gallery. I rise for the purpose of expressing the hope that the Solicitor-General may not have closed his mind finally on this matter. I urge upon him that another 12 months is a very long period indeed to keep this matter in suspense. In April, 1947, we shall be approximately 18 months after VJ-Day.
Reference has been made from this Front Bench to the temporary absence of the Chancellor of the Exchequer. I hope that does not mean that the Solicitor-General has instructions to remain entirely uninfluenced by the Debate upon the proposed new Clause. If there is no Minister who can yield to the opinions expressed on both sides of the House, and if the Solicitor-General is there merely for the purpose of ringing a bell in the Smoke Room and the Terrace Bar, it is a pity. This is the Finance Bill, which cannot be amended in another place. The Solicitor-General therefore is the arbiter of fate, on these proposals. Upon his shoulders will

rest the responsibility. He has to take the decision here and now. He is evidently a man after the very heart of the Minister of Fuel and Power, who has been dealing with some of these matters during the weekend.
No speech has come from behind the Solicitor-General supporting his attitude, whilst we have had the advantage of support of an extremely well informed kind from the Government side. I hope that the Solicitor-General, conciliatory as he usually is, will not take up a harsh and unyielding attitude on this matter. The Financial Secretary to the Treasury is with him and we are at a stage of the day when all that hon. Gentleman's faculties are fully awake. It is very early in the Sitting. I am sure the hon. Gentleman has followed the Debate with very great care, and I therefore appeal to him and to the Solicitor-General to make a further statement.

Captain Crookshank: I hope we are to have a further reply. I have been looking patiently round the corner for the Chancellor of the Exchequer to arrive. For some reason, as on the previous occasion, he is absent. I would like to remind hon. Gentlemen of what passed before. This matter was debated on 25th June, and not in the middle of the night, either. It was about six o'clock in the evening. Fortunately the time is shown in the columns of HANSARD. We were then discussing the Profits Tax, and after the appeals and strong arguments which were made on tins new Clause, the Chancellor said that he was caught at a certain disadvantage. He said:
Although I have my own view on these matters, I have not had the benefit of hearing what has been said from the other side of the Committee.
He did not tell us what his views were, but he assured us that he had them. He went on:
Therefore, I do not think it would be right for me to say more now than that I will study the arguments, as this is a matter to which the Opposition attach considerable importance, and if they will not press the Clause now, I will look at the Debate in HANSARD and consider between now and the Report stage, according to such judgment as I can form about it"—
bearing in mind that he had already said he had certain views on the matter.—
if there is anything that can be done to meet the case which they have put. I do not think that it would be honest or sensible


for me to do more than that; but that much I undertake to do."—[OFFICIAL REPORT, 25th June, 1946; Vol. 424, c. 1123.]
Since then, he has done nothing at all, except absent himself once again. On that statement, my right hon. Friend the Member for West Bristol (Mr. Stanley) advised his hon. Friends not to take the matter further on that day. In consequence, the Motion and Clause were withdrawn. Since then the Chancellor has had the opportunity, which he said he was going to take, of reading the Debate and of considering what he should do. What has happened? He does not come here, and he gives the Solicitor-General some little statement, which the hon. and learned Gentleman read out with great care and accuracy, to the effect that without making any commitment the Chancellor would look at the matter more fully before the next Finance Bill. Really, what has he been doing since 25th June? He told us then he would look at the matter very carefully and consider it, according to such judgment as he could form. He is doing exactly and precisely nothing. We can therefore do nothing but divide the House on the matter, to show our disapproval of his handling of the affair.
5.0 p.m.
I would ask the Solicitor-General whether he proposes to address the House again on this matter, and to explain why he has not given us any amplification of the statement that he made on 25th June on this new Clause. He then said:
It will be an expensive concession—it is one which cannot be afforded."—[OFFICIAL REPORT, 25th June, 1946; Vol. 424, C. 1112.]
I do not understand that statement, because no one has given us figures to show that this matter is so expensive as is suggested. On the previous occasion the Solicitor-General took the argument that so far as these expenditures were of a revenue nature they would be allowed as deductions from profits under the ordinary provisions of the Income Tax Acts. When it came to expenditure of a capital nature, he said quite a lot explaining that rehabilitation expenditure which is of a capital nature is not useless, from his point of view, to business, and indeed that it will serve as a lasting asset, and therefore the proposals which we are protesting against are not quite as harsh

as hon. Gentlemen on this side of the House might think at first blush, because the asset continues after the rehabilitation has taken place. After having given that previously as a general background to the argument, the Solicitor-General goes on today to say that it will not be easy to single out rehabilitation costs in a way that we are not doing for any other expenses of reconstruction. I do not understand why that should be so. There is a definition of rehabilitation expenditure, and there is nothing to prevent that being singled out. If it turns out that there art other reconstruction expenses of somewhat like nature, perhaps they can be dealt with on a subsequent occasion. This Amendment was supported by an hon. Member behind the Solicitor-General, one who is as expert on these very technical matters as the hon. and learned Gentleman himself —

Mr. James Hudson: The hon. Member has gone, too.

Captain Crookshank: Yes, but he went after having made a valuable contribution. The Chancellor has made no contribution whatsoever, except a little slip of paper which he handed to the Solicitor-General. The hon. Member for Chesterfield (Mr. Benson) is one of the experts, and recognises the validity of the claim we are making. It would be a very great mistake for this Bill to leave us without having this Amendment in it. If it is proved to be inadequate later on, it can be added to, but it is quite certain that no one will want to take this provision out because, even if we accepted the undertaking to give further consideration during the next twelve months, the Chancellor would be bound to come down on our aide of the argument at the finish. He ought to accept the Amendment now, and remove the anxiety which exists in many quarters. It has been pointed out that by the time we get the next Finance Bill two years and more will have elapsed since the end of the war. Surely this is the time to tidy up these post-war complications.
I hope the Solicitor-General will have been moved by what has been said, though I am afraid that he is bound by the little sentence written on the piece of paper. If that is so, it would be quite possible for him to adjourn further consideration of this Clause and consult the Chancellor,


if he can find him. There are still no signs of the Chancellor—.[An HON. MEMBER: "He is not far away."]. If he is not far away, it is an absolute outrage. If he is hiding behind the Chair and is visible to hon. Gentlemen opposite but not to me, it is treating the House with absolute contempt, and on these grounds alone we would be justified in taking a Division. However, it is not on those

grounds that I ask the House to support us, but because a valid argument has been made and because the time for the problem to be settled is now, and not 12 months hence.

Question put, "That the Clause be read a Second time."

The House divided: Ayes, 119; Noes, 194.

Division No. 248]
AYES
[5.6 p.m.


Allen, Lt.-Col. Sir W. (Armagh)
Gammans, L. D.
Peake, Rt. Hon. O.


Amory, D. Heathcoat
George, Lady M. Lloyd (Anglesey)
Peto, Brig. C. H. M.


Anderson, Rt. Hn. Sir J. (Scot. Univ.)
Glyn, Sir R.
Pickthorn, K.


Assheton, Rt. Hon. R.
Gridley, Sir A.
Pitman, I. J.


Astor, Hon. M.
Grimston, R. V.
Prescott, Stanley


Baxter, A. B.
Hannon, Sir P. (Moseley)
Raikes, H. V.


Beamish, Maj. T. V. H.
Headlam, Lieut.-Col. Rt. Hon. Sir C.
Rayner, Brig. R.


Beechman, N. A.
Hinchingbrooke, Viscount
Reid, Rt. Hon. J. S. C. (Hillhead)


Bennett, Sir P.
Holmes, Sir J. Stanley (Harwich)
Roberts, Emrys (Merioneth)


Birch, Nigel
Hope, Lord J.
Roberts, Maj. P. G. (Ecclesall)


Boothby, R.
Howard, Hon. A.
Roberts, W. (Cumberland, N.)


Bowen, R.
Hurd, A.
Robinson, Wing-Comdr. Roland


Bower, N.
Hutchison, Lt.-Cm. Clark (E'b'rgh W.)
Ross, Sir R.


Boyd-Carpenter, J. A.
Jeffreys, General Sir G.
Savory, Prof. D. L.


Bracken, Rt. Hon. Brendan
Joynson-Hicks, Lt-Cdr. Hon. L. W
Shephard, S. (Newark)


Braithwaite, Lt.-Comdr. J. G.
Keeling, E. H.
Smiles, Lt.-Col. Sir W.


Bromley-Davenport, Lt.-Col. W
Kingsmill, Lt.-Col. W. H.
Smith, E. P. (Ashford)


Buchan-Hepburn, P. G. T.
Langford-Holt, J.
Smithers, Sir W.


Butcher, H. W.
Legge-Bourke, Maj. E. A. H
Stanley, Rt. Hon. O.


Butler, Rt. Hon. R.A. (S'ffr'n W'ld'n)
Lennox-Boyd, A. T.
Stewart, J. Henderson (Fife, E.)


Byers Lt.-Col. F.
Lipson, D. L.
Strauss, H. G. (English Universities)


Clarke, Col. R. S.
Lucas, Major Sir J.
Stuart, Rt. Hon. J. (Moray)


Clifton-Brown, Lt.-Col. G
Lucas-Tooth, Sir H.
Taylor, C. S. (Eastbourne)


Conant, Maj. R. J. E.
MacAndrew, Col. Sir C.
Taylor, Vice-Adm. E. A (P'ddt'n, S.)


Corbett, Lieut.-Col. U (Ludlow)
Mackeson, Lt.-Col. H. R.
Teeling, William


Crookshank, Capt. Rt. Hon. H. F. O.
McKie, J. H. (Galloway)
Thorp, Lt.-Col. R. A. F


Crosthwaite-Eyre, Col. O. E.
McKinlay, A. S.
Touche, G. C.


Crowder, Capt. J. F. E.
Macpherson, Maj. N. (Dumfries)
Turton, R. H.


Darling, Sir W. Y.
Maitland, Comdr. J. W.
Vane, W. M. T.


Davies, Clement (Montgomery)
Manningham-Buller, R. E
Wadsworth, G.


Dodds-Parker, A. D.
Marlowe, A. A. H
Walker-Smith, D.


Donner, Sqn.-Ldr. P. W.
Marples, A. E.
Watt, Sir G. S. Harvie


Dower, Lt.-Col. A. V. G. (Penrith)
Marshall, D. (Bodmin)
Webbe, Sir H. (Abbey)


Drayson, Capt. G. B.
Medlicott, F.
Wheatley, Colonel M. J.


Dugdale, Maj. Sir T. (Richmond)
Mellor, Sir J.
Williams, C. (Torquay)


Duthie, W. S.
Molson, A. H. E.
Willoughby de Eresby, Lord


Eccles, D. M.
Morrison, Rt. Hn. W. S. (Cirencester)
York, C.


Fletcher, W. (Bury)
Neven-Spence, Sir B
Young, Sir A. S. L. (Partick)


Fraser, Maj. H. C. P. (Stone)
Nicholson, G.



Fraser, Sir I. (Lonsdale)
Orr-Ewing, I. L
TELLERS FOR THE AYES:


Galbraith, Cmdr. T. D.
Osborne, C.
Mr. Drewe and Mr. Studholme




NOES


Adams, Richard (Balham)
Bruce, Maj. D. W. T.
Dalton, Rt. Hon. H.


Adams, W. T. (Hammersmith, South)
Burke, W. A.
Davies, Ernest (Enfield)


Allen, Scholefield (Crewe)
Butler, H. W. (Hackney, S.)
Davies, Harold (Leek)


Anderson, A. (Motherwell)
Callaghan, James
Diamond, J.


Attewell, H. C.
Castle, Mrs. B. A.
Dobbie, W.


Austin, H. L.
Chamberlain, R. A
Dodds, N N.


Awbery, S. S.
Champion, A. J.
Dugdale, J. (W. Bromwich)


Ayrton Gould, Mrs. S.
Chater, D.
Dumpleton, C. W


Bacon, Miss A.
Chetwynd, Capt. G. R
Durbin, E. F. M.


Balfour, A.
Clitherow, Dr. R.
Dye, S


Barstow, P, G
Cluse, W. S.
Edwards, John (Blackburn)


Barton, C.
Cobb, F. A.
Evans, E. (Lowestoft)


Battley, J. R
Cocks, F. S.
Follick, M.


Bechervaise, A. E.
Coldrick, W.
Foot, M. M.


Binns, J.
Collindridge, F.
Forman, J. C.


Bottomley, A, G.
Collins, V. J.
Freeman, Maj. J. (Watford)


Bowles, F. G. (Nuneaton)
Colman, Miss G. M
Ganley, Mrs. C. S.


Braddock, Mrs. E. M. (L'pl, Exch'ge)
Comyns, Dr. L
Gilzean, A.


Brook, D. (Halifax)
Cook, T. F.
Glanville, J. E. (Consett)


Brooks, T. J. (Rothwell)
Corlett, Dr. J
Goodrich, H. E.


Brown, George (Belper)
Crossman, R. H. S.
Gordon-Walker, P. C.


Brown, T. J. (Ince)
Daggar, G.
Greenwood, A. W. J. (Heywood)


Brown, W. J. (Rugby)
Daines, P.
Grenfell, D. R




Gunter, Capt. R. J.
Mitchison, Maj. G. R.
Smith, S. H. (Hull, S.W.)


Guy, W. H.
Monslow, W.
Smith, T. (Normanton)


Hale, Leslie
Montague, F.
Snow, Capt. J. W.


Hall, W. G. (Colne Valley)
Moody, A. S.
Sorensen, R. W.


Hannan, W. (Maryhill)
Morgan, Dr. H. B.
Soskice, Maj. Sir F


Hardy, E. A
Morris, P. (Swansea, W.)
Sparks, J. A.


Harrison, J.
Mort, D. L.
Stamford, W.


Hastings, Dr. Somerville
Moyle, A.
Stewart, Capt. Michael (Fulham, E.)


Haworth, J.
Naylor, T. E.
Swingler, S.


Henderson, Joseph (Ardwick)
Neal, H. (Claycross)
Taylor, H. B. (Mansfield)


Hicks, G.
Nichol, Mrs. M. E. (Bradford, N.)
Taylor, R. J. (Morpeth)


Hobson, C. R.
Noel-Buxton, Lady
Taylor, Dr. S. (Barnet)


Holman, P,
Paling, Will T. (Dewsbury)
Thomas, I. O. (Wrekin)


Holmes, H. E. (Hemsworth)
Palmer, A. M. F.
Thomas, George (Cardiff)


House, G.
Parker, J.
Thorneycroft, H (Clayton)


Hoy, J.
Parkin, Flt.-Lieut, B. T.
Thurtle, E.


Hudson, J. H. (Ealing, W.)
Paton, Mrs. F. (Rushcliffe)
Tiffany, S.


Hughes, Hector (Aberdeen, N.)
Paton, J. (Norwich)
Titterington, M. F.


Janner, B.
Peart, Capt. T. F.
Tolley, L.


Jones, D. T. (Hartlepools)
Perrins, W.
Vernon, Maj. W. F.


Jones, J. H. (Bolton)
Porter, G. (Leeds)
Viant, S. P.


Jones, P. Asterley (Hitchin)
Pritt, D. N.
Walkden, E.


Keenan, W
Proctor, W. T.
Walker, G. H.


Kenyon, C.
Pursey, Cmdr. H
Wallace, G. D. (Chistehurst)


Kinley, J.
Randall, H. E.
Warbey, W. N.


Kirby, B. V.
Ranger, J.
Weitzman, D.


Levy, B. W.
Rees-Williams, D R.
Wells, P. L. (Faversham)


Lewis, A. W. J. (Upton)
Reeves, J.
Wells, W. T. (Walsall)


Lewis, J. (Bolton)
Reid, T. (Swindon)
Whiteley, Rt. Hon. W


McAdam, W.
Ridealgh, Mrs. M.
Wilkes, Maj. L.


McEntee, V. La T.
Robertson, J. J. (Berwick)
Wilkins, W. A.


McGhee, H. G.
Rogers, G. H. R
Willey, F. T. (Sunderland)


Mack, J. D.
Scollan, T
Willey, O. G. (Cleveland)


McKay, J. (Wallsend)
Shackleton, Wing-Cdr. E. A. A.
Williams, D. J. (Neath)


Maclean, N. (Govan)
Sharp, Lt.-Col. G. M.
Williams, J. L. (Kelvingrove)


McLeavy, F.
Shurmer, P.
Williams, W. R. (Heston)


Manning, G. (Camberwell, N.)
Silverman, S. S. (Nelson)
Willis, E.


Manning, Mrs. L. (Epping)
Simmons, C. J.
Wilmot, Rt. Hon. J


Martin, J. H
Skeffington-Lodge, T. C
Woods, G. S


Mathers, G.
Skinnard, F. W.



Mayhew, C. P.
Smith, Rt. Hon. Sir B. (Rotherhithe)
TELLERS FOR THE NOES:


Middleton, Mrs. L.
Smith, Capt. C. (Colchester)
Mr. Pearson and Mr. Bing.


Millington, Wing-Comdr. E. R.
Smith, H. N. (Nottingham, S.)

NEW CLAUSE.—(Allowance of rehabilitation costs for income tax.)

There shall he deducted from the profits fox the purpose of the Income Tax Acts in the basis periods in which they are incurred all rehabilitation costs as defined in Subsection (5) of Section thirty-three of this Act.—[Sir A. Gridley.]

Brought up, and read the First time.

Sir A. Gridley: I beg to move, "That the Clause be read a Second time."

Lieut.-Commander Gurney Braithwaite: I beg to second the Motion.

Captain Crookshank: When Mr. Speaker was in the Chair, earlier, Mr.

Deputy-Speaker, we agreed to Debate this and the preceding Clause together, but that would not make it out of Order for the Chancellor now to give us the benefit of his views, as he was so conspicuously absent not only on the previous Clause, but also on the earlier occasion when this was debated. I invite the right hon. Gentleman, therefore, to be good enough to express his views.

Question put, "That the Clause be read a Second time."

The House divided: Ayes, 114; Noes, 195.

Division No. 249]
AYES
[5.15 p.m


Allen, Lt.Col. Sir W. (Armagh)
Butcher, H. w.
Dugdale, Maj. Sir T. (Richmond)


Amory, D. Heathcoat
Butler, Rt. Hon. R.A. (S'ffr'n Wld'n)
Duthie, W. S.


Anderson, Rt. Hn. Sir J. (Scot. Univ.)
Byers Lt.-Col. F.
Eccles, D. M


Assheton, Rt. Hon. R
Clarke, Col. R. S.
Fletcher, W. (Bury)


Astor, Hon. M.
Clifton-Brown, Lt.-Col. G.
Fraser, Sir I. (Lonsdale)


Baxter, A. B.
Conant, Maj. R. J. E.
Galbraith, Cmdr. T. D.


Beamish, Maj. T. V. H.
Corbett, Lieut.-Col. U. (Ludlow)
George, Lady M. Lloyd (Anglesey)


Beechman, N. A.
Crookshank, Capt. Rt. Hon. H. F C.
Gridley, Sir A.


Bennett, Sir P,
Crosthwaite-Eyre, Col. O. E.
Grimston, R. V.


Birch, Nigel
Crowder, Capt. J. F. E.
Hannon, Sir P. (Moseley)


Bower, N.
Darling, Sir W. Y.
Headlam, Lieut.-Col. Rt. Hon. Sir C


Boyd-Carpenter, J. A.
Davies, Clement (Montgomery)
Hinchingbrooke, Viscount


Bracken, Rt. Hon. Brendan
Dodds-Parker, A. D.
Holmes, Sir J. Stanley (Harwich)


Braithwaite, Lt.-Comdr. J. G.
Donner, Sqn.-Ldr. P. W.
Hope, Lard J.


Bromley-Davenport, Lt.-Col. W.
Dower, Lt.-Col. A. V. G. (Penrith)
Howard, Hon. A.


Buchan-Hepburn, P. G. T.
Drayson, Capt. G. B.
Hurd, A.




Hutchison, Lt.-Cm. Clark (E'b'rgh W.)
Morrison, Rt. Hn. W. S. (Cirencester)
Stewart, J. Henderson (Fife, E.)


Jeffreys, General Sir G.
Neven-Spence, Sir B.
Strauss, H. G. (English Universities)


Joynson-Hicks, Lt.-Cdr. Hon. L. W
Nicholson, G.
Stuart, Rt. Hon. J. (Moray)


Keeling, E. H.
Orr-Ewing, I. L.
Taylor, C. S. (Eastbourne)


Kingsmill, Lt.-Col. W. H.
Osborne, C.
Taylor, Vice-Adm. E. A. (P'ddt'n, S.)


Langford-Holt, J.
Peake, Rt. Hon. O
Teeling, William


Legge-Bourke, Maj. E. A. H.
Peto, Brig. C. H. M.
Thorp, Lt.-Col. R. A. F.


Lennox-Boyd, A. T.
Pickthorn, K.
Touche, G. C.


Lipson, D. L.
Pitman, I. J.
Turton, R. H.


Lucas, Major Sir J.
Prescott, Stanley
Vane, W. M. T.


Lucas-Tooth, Sir H.
Raikes, H. V.
Wadsworth, G.


MacAndrew, Col. Sir C.
Rayner, Brig. R.
Walker-Smith, D.


Mackeson, Lt.-Col. H. R.
Reid, Rt. Hon. J. S. C. (Hillhead)
Watt, Sir G. S. Harvie


McKie, J. H. (Galloway)
Roberts, Emrys (Merioneth)
Webbe, Sir H. (Abbey)


Macpherson, Maj. N. (Dumfries)
Roberts, Maj. P. G. (Ecclesall)
Wheatley, Colonel M. J.


Maitland, Comdr. J. W.
Roberts, W. (Cumberland, N.)
White, J. B. (Canterbury)


Manningham-Buller, R. E.
Robinson, Wing-Comdr. Roland
Williams, C. (Torquay)


Marlowe, A. A. H.
Ross, Sir R,
Willoughby de Eresby, Lord


Marples, A. E.
Shephard, S. (Newark)
York, C.


Marshall, D. (Bodmin)
Smiles, Lt.-Col. Sir W.
Young, Sir A. S. L. (Partick)


Medlicott, F.
Smith, E. p. (Ashford)



Mellor, Sir J.
Smithers, Sir W.
TELLERS FOR THE AYES:


Molson, A. H. E.
Stanley, Rt. Hon. O.
Mr. Drewe and Mr. Studholm




NOES.


Adams, Richard (Balham)
Freeman, Maj. J. (Watford)
Neal, H. (Claycross)


Adams, W. T. (Hammersmith, South)
Ganley, Mrs. C. S.
Nichol, Mrs. M. E. (Bradford, N.)


Allen, Scholefield (Crewe)
Gilzean, A.
Noel-Buxton, Lady


Anderson, A. (Motherwell)
Glanville, J. E. (Consett)
Paling, Will T. (Dewsbury)


Attewell, H. C.
Goodrich, H. E.
Palmer, A. M. F.


Austin, H. L.
Gordon-Walker, P. C.
Parker, J.


Awbery, S. S.
Greenwood, A. W. J. (Heywood)
Parkin, Fit.-Lieut. B. T.


Ayrton Gould, Mrs. B
Grenfell, D. R.
Paton, Mrs. F. (Rushcliffe)


Bacon, Miss A.
Gunter, Capt. R. J
Paton, J. (Norwich)


Balfour, A.
Guy, W. H.
Peart, Capt. T. F.


Barstow, P. G
Hale, Leslie
Perrins, W.


Barton, C.
Hall, W. G. (Colne Valley)
Porter, G. (Leeds)


Battley, J. R
Hannan, W. (Maryhill)
Pritt, D. N.


Bechervaise, A. E.
Hardy, E. A.
Proctor, W. T.


Binns, J.
Harrison, J.
Pursey, Cmdr. H.


Bottomley, A. G.
Hastings, Dr. Somerville
Randall, H. E.


Bowles, F. G. (Nuneaton)
Haworth, J.
Ranger, J.


Braddock, Mrs. E. M. (L'pl, Exch'ge)
Henderson, Joseph (Ardwick)
Rees-Williams, D. R.


Brook, D. (Halifax)
Hicks, G.
Reeves, J.


Brooks, T. J. (Rothwell)
Hobson, C. R.
Reid, T. (Swindon)


Brown, George (Belper)
Holman, P.
Rhodes, H.


Brown, T. J. (Ince)
Holmes, H. E. (Hamsworth)
Ridealgh, Mrs, M.


Bruce, Maj. D. W. T.
House, G.
Robertson, J. J. (Berwick)


Burke, W. A.
Hoy, J.
Rogers, G. H. R.


Butler, H. W. (Hackney, S.)
Hudson, J. H. (Ealing, W.)
Scollan, T.


Callaghan, James
Hughes, Hector (Aberdeen, N.)
Shackleton, Wing-Cdr. E. A. A.


Castle, Mrs. B. A.
Jones, D. T. (Hartlepools)
Sharp, Lt.-Col. G. M.


Chamberlain, R. A.
Jones, J. H. (Bolton)
Shurmer, P.


Champion, A. J.
Jones, P. Asterley (Hitchin)
Silverman, S. S. (Nelson)


Chater, D.
Keenan, W.
Simmons, C. J.


Chetwynd, Capt. G. R.
Kenyon, C.
Skeffington-Lodge, T. C


Cluse, W. S.
Kinley, J.
Skinnard, F. W.


Cobb, F. A.
Kirby, B. V.
Smith, Rt. Hon. Sir B. (Rotherhithe)


Cocks, F. S.
Levy, B. W.
Smith, Capt. C. (Colchester)


Coldrick, W.
Lewis, A. W. J. (Upton)
Smith, H. N. (Nottingham, S.)


Collindridge, F.
Lewis, J. (Bolton)
Smith, S. H. (Hull, S.W.)


Collins, V. J.
McAdam, W.
Smith, T. (Normanton)


Colman, Miss G. M.
McEntee, V. La T.
Snow, Capt. J. W.


Comyns, Dr. L.
McGhee, H. G.
Solley, L. J.


Cooper, Wing-Comdr. G
Mack, J. D.
Sorensen, R. W.


Corlett, Dr. J,
Maclean, N. (Govan)
Soskice, Maj. Sir F.


Crossman, R. H. S.
McLeavy, F.
Sparks, J. A.


Daggar, G.
Manning, C. (Camberwell, N.)
Stamford, W.


Daines, P.
Manning, Mrs. L. (Epping)
Stewart, Capt. Michael (Fulham, E.)


Dalton, Rt. Hon. H.
Martin, J. H.
Swingler, S.


Davies, Ernest (Enfield)
Mathers, G.
Taylor, H. B. (Mansfield)


Davies, Harold (Leek)
Mayhew, C. P.
Taylor, R. J. (Morpeth)


Diamond, J
Middleton, Mrs. L.
Taylor, Dr. S. (Barnet)


Dobbie, W.
Millington, Wing-Comdr. E. R
Thomas, I. O. (Wrekin)


Dodds, N. N.
Mitchison, Maj. G. R.
Thomas, John R. (Dover)


Dugdale, J. (W. Bromwich)
Monslow, W.
Thomas, George (Cardiff)


Dumpleton, C. W.
Montague, F.
Thorneycroft, H (Clayton)


Durbin, E. F. M.
Moody, A. S.
Thurtle, E.


Dye, S.
Morgan, Dr. H. B.
Tiffany, S.


Edwards, John (Blackburn)
Morris, P. (Swansea, W.)
Titterington, M. F.


Evans, E. (Lowestoft)
Morrison, Rt. Hon. H. (Lewisham, E.)
Tolley, L.


Follick, M.
Mort, D. L.
Vernon, Maj. W. F.


Foot, M. M.
Moyle, A.
Viant, S. P.


Forman, J. C.
Naylor, T. E.
Walkden, E







Walker, G. H.
Wilkes, Maj. L.
Willis, E.


Wallace, G. D. (Chislehurst)
Wilkins, W. A.
Wilmot, Rt. Hon. J


Warbey, W. N.
Willey, F. T. (Sunderland)
Woods, G. S.


Weitzman, D.
Willey, O. G. (Cleveland)
Wyatt, Maj. W.


Wells, P. L. (Faversham)
Williams, D. J. (Neath)



Wells, W. T. (Watsall)
Williams, J. L. (Kelvingrove)
TELLERS FOR THE NOES


Whiteley, Rt Hon. W.
Williams, W. R. (Heston)
Mr. Pearson and Mr. Bing.

NEW CLAUSE.—(Relief for tenants on the maintenance of property.)

(1) For the purposes of Rule 8 of No. V of Schedule A as amended by Section thirty-two of the Income Tax Act, 1945 (which grants relief in respect of maintenance, repairs, insurance and management of property), a person occupying any premises as the tenant thereof shall be treated as if he were the owner thereof if, under the covenants contained in the lease or agreement by virtue of which he occupies the premises, the whole of the burden of repairing the premises falls upon him.

(2) The provisions of this Section shall have effect as from the sixth day of April, nineteen hundred and forty-six, and accordingly in Subsection (1) of Section thirty-three of the Income Tax Act, 1945, the words "or, in the case of expenditure by a tenant, could, if he had been the owner," shall be omitted.—[Viscount Hinchingbrooke.]

Brought up, and read the First time.

Viscount Hinchingbrooke: I beg to move, "That the Clause be read a Second time."
On the Committee stage of this Bill the Solicitor-General undertook to look into the point which I then raised. I therefore put this Clause down in the hope that the House might receive a considered reply from him. He said at the time that my purpose seemed to him then to be not far away from the present state of the law. If that proves to be the case, I hope that the Government will consent to accept this Clause. It leads one to reflect how difficult it is for hon. Members on either side of this House to move a Clause which affects the law in any degree at all, but, on the other hand, how extraordinarily easy for hon. and right hon. Gentlemen on the Front Bench opposite to initiate whole Acts of Parliament, which carry out revolutionary and overwhelming changes in our society.
I would like to remind the House what this Clause does. It applies the procedure of the maintenance claim to the last remaining class of property which is not covered by it. I am sure that the House is already familiar with the procedure of the maintenance claim under the successive Income Tax Acts, particularly under Schedule A, and I will not go into that. I think it is sufficient to say that all

owner-occupiers, whether rural or urban, are already covered by the principle of the maintenance claim, likewise, all tenants whose repairs are undertaken by the landlord, and that applies, of course, equally to agricultural estates and urban properties. Again, all tenants are covered by this principle of the maintenance claim who retain a financial interest in the property, that is to say, where the Schedule A assessment is in excess of the rent. Perhaps I ought to say, not wholly covered but partially covered. They may claim back from the Revenue tax on the cost of repairs up to the limit of the difference between the rent and the Schedule A assessment.
The law has hitherto generally held—I say "generally held" because two inroads, to which I will refer in a moment, have been made into it in recent years—that the Income Tax Acts only grant maintenance relief against tax levied in respect of the property, and also, and this is what is important, where it is borne by the person who maintains the property. I suggest that in these days that is becoming a bad principle, because it takes account of the status of the person who pays the tax and not the status of the property. The true object of the State should be to stimulate repairs of property, and it ought not to matter who pays the tax.
I suggest to the House that Parliament has already recognised that this is a bad principle in two respects, by two separate pieces of legislation. They constitute my precedents in moving this Clause. First of all, the Finance Act, 1940, provided that tenants with a lease of over 50 years were to be treated as if they were owners, and, apart altogether from what was the class of property or what was the relation between the rent and Schedule A, these tenants were enabled to put in a full maintenance claim on the ordinary statutory repairs, in exactly the same way as owners. Secondly, the Income Tax Act, 1945, Section 32, which provided that the relief which the owner of agricultural property can obtain is not to be restricted to the Schedule A Tax, but can be allowed


against other sources of income. That piece of legislation vitiates the principle that a tenant cannot get relief because he does not bear tax in respect of the property.
I would like the House to consider the kind of property I have in mind. It may be a row of fairly old valuable houses, which belong, shall we say, to the Crown Lands Commission or to the Ecclesiastical Commission. They are let to tenants, each of whom has a lease of under 50 years. Every one of these tenants, as the law now stands, can only repair that property out of his net income. None can get any relief by way of maintenance claim. Taxation being what it is, such properties will tend to deteriorate more rapidly than properties in other classes. That cannot be of advantage to tenants, to owners or to the State. I suggest that by a simple enactment it will be possible to raise this class of property, as regards maintenance, to the ordinary level of other property. Very often these tenants have to undertake enforced expenditure; local authority by-laws or the terms of the lease require them to paint the property at certain definite times, and keep it up to a certain standard. That now falls on them for payment, and they can claim nothing back from the Revenue.
In this time of shortage of houses, there should be no discrimination against particular classes of property. Every house capable of repair should be repaired, and all should receive the equivalent financial assistance from the revenue. I do not know whether the Solicitor-General is going to accept this Clause; he has a rather stern expression on his face, and it may be that he is going to refuse this. I hope that in that event serious consideration will be given by the Treasury to the rather anomalous state of the law in respect of this class of property, and that satisfactory changes will be made during the course of the next year.

5.30 p.m.

Mr. David Eccles: I beg to second the Motion.
I am not a lawyer, and, therefore, I do not know precisely how tenants are placed in all circumstances in regard to repairing allowances. I wish to support the Clause in respect of agricultural property. I know instances of smallholders in par-

ticular who have very considerable capital expenses placed upon them as tenants. I wish to know whether the tenant in that case does, or does not, get the benefits of the 1945 Act. If not, would it not he possible for the tenant to have those benefits if the Clause becomes law? As an example, there are smallholders, tenants of Wiltshire County Council, who have very heavy expenses in keeping up a road which goes to a dozen or more of their smallholdings. If the expenses of maintaining that properly fell on the landlord, he would get the allowance. But I understand that the smallholders do not get it, because they are tenants. Yet, under their leases, they have to spend that money. There are other agricultural tenants on Salisbury Plain, for instance, who take blocks of land from the War Office, who are the owners of the land for training purposes. In their leases they undertake to spend money on the capital equipment of the land. Although they are tenants, do they rank for allowances under the 1945 Act? I think not. It would be a very good thing, in regard to their cottages, which they have to keep up, if the Clause were put on the Statute Book.

Mr. McKie: I wish to support the new Clause. The noble Lord the Member for South Dorset (Viscount Hinchingbrooke) instanced a class of people who would be unable to do anything towards keeping property, which they hold on lease, in proper repair. He also instanced people holding property under the Crown Lands Commissioners and the Ecclesiastical Commissioners. They were tenants of those two bodies and, as the Income Tax Acts at present stand, they would be precluded, because they have no maintenance claim for carrying out very necessary repairs to the property. I have great sympathy with that class of people, because they are people of small means, on whom the burden of taxation rests very heavily indeed. Here we are deliberately precluding them—that is if the Solicitor-General turns a deaf ear to us, and I hope he wilt not—from carrying out necessary repairs to property. It is necessary that any Government should have proper repair and maintenance of property very much in their minds and at heart.
The class of persons of whom the noble Lord spoke, are not bloated capitalists whom the Chancellor always seems to


suggest he wishes to do down at every turn. I hope that he or the Solicitor-General will indicate that they are either prepared to accept the Clause, or that at the next opportunity during the passage of the Finance Bill next year, they will do something about the matter. There are other people affected besides those mentioned by the noble Lord, and by my hon. Friend the Member for Chippenham (Mr. Eccles). I suppose I shall not meet with much response from the Chancellor on this point. There are many large properties in the country, where there may be dwelling houses or farms let on repairing leases. It may be that the landlord is unable to carry out the necessary repairs. The property may be in the hands of trustees, and let on repairing leases. What incentive is there to the persons occupying those premises, or agricultural lands, to carry out the necessary repairs to keep the property in proper order? We on this side of the House are not asking for any doles for landlords. I hope we shall not have any hon. or right hon. Member resisting the new Clause on that assumption.

Mr. Scollan: If this Clause were carried, would it not facilitate the existing habit of landlords transferring the burden of repairs to tenants?

Mr. McKie: If the hon. Member had studied the matter a little more carefully, and if he will study it in the future, he will see that the point he has sought to make is not a point at all. There is not a landlord desirous of shelving his liabilities on to the shoulders of the tenant. When the hon. Member interrupted with that quite irrelevant question, I was hoping that the Chancellor would have something to say in the way of accepting this new Clause, or, at all events, that he would tell us that proper care of property is a matter which concerns the Government very much. I and my hon. Friends have no desire whatever unduly to benefit either the landlord or the tenant, but we simply wish that property should be kept in order.

Mr. C. Williams: In looking at a matter of this kind I have often asked myself what is the really guiding word and the objective of the Clause. The guiding word of this Clause is undoubtedly "maintenance." I think we should examine the object of the Treasury in

granting maintenance to the landowner. It is not that the Treasury is benevolent, kindly, or even hard-hearted. It is purely that the Treasury looks at the matter from the point of view that, if property is not maintained, the Treasury will cease to get income. That is the only reason why the landowner is enabled to get maintenance for the repair of his property. I know of no other reason. The Treasury catches it both way—if the property goes out of repair and the owner dies, he does not pay much in Death Duties, and if it goes out of repair and he does not die, he does not pay Income Tax on it. To take the matter a step further, we come to the question of why there has been this vital difference between the tenant who does repairs and the landowner who does repairs.
We have had previous Chancellors of the Exchequer who did not change it. I think it was in 1940 that we had a Chancellor of very great skill who introduced a system whereby tenants who had a lease of over 50 years were allowed a maintenance claim. I believe that was one of the first innovations in this connection. We have arrived at the position when it is no good the Chancellor saying,
"This is against precedent and against our habits and customs," because the innovation has begun.
Let us consider why it is better to give maintenance to a landowner than to a tenant. I can conceive lots of reasons, and I have no doubt that hon. Gentlemen opposite can see good reasons, but I do not think, from any fundamental sense of fairness, we can possibly justify a tenant, who has to put on, say, a new roof, getting no relief for the maintenance of the house which he maintains in order that the Chancellor of the Exchequer may get Income Tax out of it. I see no reason why he should have to do it out of his net income without any relief while the landowner gets relief. I happen to be a landowner and hon. Gentlemen opposite, therefore, cannot say that in this matter I am seeking to protect my own interests. If this suggestion is accepted, it will help a considerable number of agricultural properties and a very large number of smaller properties. It will also help considerably in future development I urge the Chancellor, if he wants to keep up his revenue and if he wants to keep factories, works, and houses in a high state of repair, to


apply the law with the same kindliness and fairness to the tenants as he does to the landlords in this respect. It is only fair that he should benefit both. That is the main argument in favour. I notice that hon. Gentlemen opposite, who are not so virulent or in such force as they are at times, do not seem very well disposed towards this new Clause. I am puzzled at that. I should have thought that they would have supported it. This is the kind of Clause which I should have expected not from a noble Lord and a Tory, but from some one who believes in helping tenants rather than owners. We have the rather curious anomaly of the Tory Party supporting the tenants of the property—of course, most of us have a a very large number of tenants who vote for us, and we are getting more and more supporters every day—and the Socialist Party remaining completely and utterly dumb, unable to say any word on behalf of the tenants. I am not surprised. I know, "Orders is orders," so to speak. I could never do a thing like that myself.
In view of the fact that we know the policy of the Government with regard to the renting of houses, might we not expect the Chancellor of the Exchequer to accept our point of view and to put it into effect? The Chancellor often tells us that he is not a short-sighted person. Many of us would be quite willing to take his word if only he would give us a little illustration. He should remember that over the years to come revenue would swell enormously if this was brought in because it would encourage the development of property very considerably. He should not take the short view that he may lose a few hundreds or thousands of pounds in the next year. For those reasons I support the Motion. I do not know whether I shall get any support from hon. Gentlemen opposite or from any other hon. Gentlemen on this side of the House. The good work, begun so well in 1940, which had to be stopped because it was difficult to do anything of the sort during the war, should be continued. I should have thought that this work in favour of the tenant who tries to develop his house and property was the kind of work which the Government, with their urge to progress and advancement, would seize upon and that they would exempt one and all.

5.45 p.m.

Sir John Anderson: The Chancellor of the Exchequer has been kind enough already today to give effect to a suggestion of mine on Income Tax law. As I was not in my place when he moved the Clause in question, I should like at once to acknowledge his kindness in that respect, and to build on that kindness the hope that he will at least listen to what I should like to submit to the House on the proposal which we are now discussing. I ought to say at once that I am a tenant of a leasehold property. I am not interested in this particular proposal because the lease of my house runs for more than 50 years.. Being in that position, however, I know something of the facts of the case, and I should like to make quite clear just what is the issue that arises in this connection and just why there is, as a matter of historical fact, this rather curious difference in treatment between the landlord and the tenant—a difference in favour of the landlord.
Take the case of two houses which are, in all respects, exactly similar, assessed at the same amount—old houses upon which the burden of repair is very great. In one case, the landlord is responsible for the repairs, and in the other case the tenant is responsible, because of an arrangement between landlord and tenant. When the landlord executes the repairs, he gets relief; when the tenant executes the repairs, he does not get relief. Why does that arise? It arises because when the landlord incurs the expense of repair, that expense reduces his income and he pays on a reduced amount; but when the tenant executes the repairs the cost of executing the repairs is a charge which the tenant has to meet out of income, the income itself remaining unaffected. Therefore, in accordance with the well established principles of Income Tax law, the landlord gets relief, and the tenant does not.
That did not matter very much—no doubt the point was not regarded as of any material importance—when the rate of tax was low. But when the rate of tax is high, it is of very real importance. I imagine it was for that reason that in 1940 a change was made in favour of the tenant, notwithstanding that it involved a breach of the commonly accepted principle of Income Tax law that one looks at the amount of income, and takes


account of anything which is a deduction from the income, but takes no account of the charges which have to be met by the possessor of the income. The principle in fact admits of exceptions. The whole system of allowances in respect of family obligations represents a breach in the first principle by which income is determined for the purpose of levying Income Tax.
It seems to me that here, when we are doing it with our eyes open, we might well recognise that there is not, in fact, any justice in treating a landlord in this matter more favourably than a tenant, simply because he is a landlord and because a certain amount of money in his hands is income, and, in regard to the tenant, it is not, technically, income. I hope, therefore, that the Chancellor will give consideration to this matter, and, even if he is not now prepared, so far as he has been able to consider the matter, to agree to the suggestion, he will go into it and will store it up as one of the various acts of benevolence to which he hopes to be able to treat the community later on. I think, although I made it perfectly clear that the differentiation between landlord and tenant in this matter is something which can be justified in argument by reference to the principles on which the Income Tax structure was erected, we should, at the same time, recognise that, with tax at the level at which it now stands, there must, inevitably, if hardship is not to be inflicted upon taxpayers, be some well-considered exceptions or departures from the logical principle, as it might be automatically applied, and I suggest, for the Chancellor's consideration, that there is here a case for favourable treatment.

Mr. Bowles: May I ask the right hon. Gentleman why, since the tax was high when he was Chancellor of the Exchequer, he did not do it himself?

Sir J. Anderson: I am quite prepared to answer that question, though it is not particularly relevant to the case I have put. I had a great many suggestions to consider. I agreed, in certain cases, to make very important departures from what had been regarded as almost sacred principles of Income Tax law. I could not do everything at once; I did not do everything at once, and I do not ask the Chancellor to do something now to which I would not be prepared to give sympathe-

tic consideration had I been in his place at this moment.

The Solicitor-General: The right hon. Gentleman the Member for the Scottish Universities (Sir J. Anderson) invited us on this side of the House, and my right hon. Friend in particular, to store up and consider the arguments which have been advanced, and that invitation the Chancellor readily accepts, and he will give the most—

Sir J. Anderson: Only if he could not do it now.

The Solicitor-General: I will say why my right hon. Friend feels that he cannot do it now, and why we feel that we can only store it up and consider it, which we shall readily undertake to do. I was surprised to hear the right hon. Gentleman, as I was surprised to hear the noble Lord, say that, in circumstances such as they outlined, tenants would not be able to claim relief in respect of repairs under Rule 8 of No. 5 of Schedule A. I am not speaking of tenants with leases of over 50 years but of tenants with leases under 50 years. The tenant who occupies land at a rent which is less than the rack rent, has a beneficial interest, and, for the purpose of Rule 8 of No. 5 of Schedule A, he is treated as the owner, and is entitled to claim the allowance which Rule 8 provides in respect of maintenance and repairs.

Sir J. Anderson: I am reluctant to interrupt the learned Solicitor-General on a legal question, but is not the extent of the relief which the tenant, in those circumstances, can claim, limited to the difference between the rent which the tenant in fact pays, and the full Schedule A value?

The Solicitor-General: That is so. He cannot get relief beyond the amount of his Schedule A tax. That I quite accept, and it is perfectly reasonable. That represents the extent of his interest, and it is what we expect the Act to provide. That is the position of the landlord, so that, in that respect, the tenant and landlord, if the tenant is a beneficial owner, are on precisely the same footing. If bon. Members will look at the new Clause, they will see that its proposals, in respect of the relief afforded by Rule 8, place the tenant on the same footing as the landlord. If and in so far as the tenant is a beneficial owner, he is already in the position of the landlord, and can claim precisely the same relief in respect of his repairs.
The noble Lord instanced the case of old houses owned by the Ecclesiastical Commissioners and let on leases of under 50 years. If, as presumably would be the case in a tenancy of that kind, the tenant has a beneficial interest, in that he occupies the property at less than the rack rent, he can claim the allowance under Rule 8. If he has not got a beneficial interest, he cannot claim the allowance, and there is not the smallest reason in the world why he should. A tenant who occupies on terms under which he has not got a beneficial interest, in that he does not get it at less than the rack rent, will, presumably, have had his rent adjusted according to whether he bears the burden of repairs or not. If he is under an obligation to pay for the repairs, clearly his rent will be proportionately lower. Conversely, if he does not have to pay for the repairs, he has to pay more in rent, and that is perfectly fair and reasonable, so that the thing is adjusted and balances itself. It is only in the case where the tenant has a beneficial interest that the question of claiming a right to an allowance under Rule 8 arises, and he has that right. Except in the case of the tenant who has no beneficial interest, the proposed new Clause does not alter the situation in the least, and does not give the tenant any right which he has not got already. In the case of the tenant not having that beneficial interest, the rent is adjusted according to whether the burden of repairs falls on him or on the landlord. Although we will certainly ponder over and consider with the greatest care the arguments that have been advanced, we feel certain, so far as our considerations have taken us hitherto, that there is no ground for accepting the new Clause.

Mr. E. P. Smith: May I point out to the learned Solicitor-General a personal experience that recently occurred to me? About three and a half years ago I had to take a couple of empty agricultural cottages in order to house two workmen. I had to pay a high rent for these cottages, and had to take them on a lease. Both cottages badly needed repairs, but I could not get the landlord to do anything at all or to make any concession to me in the way of allowance for repairs. Consequently, I repaired them myself. I could, had I so chosen, have allowed my workpeople to live in the cottages as they were, but I do not happen to be that kind of a man, and I

spent a considerable sum of money—I think, the £100 which was then allowed —on each of these cottages for repairs. I obtained no relief from Income Tax in respect of the repair of these cottages; and this proposed new Clause, had it been in existence then, would have rightly benefited me and would have encouraged me to do what, in fact, I did do, and such a Clause might well encourage other people, less interested in the conditions under which their workpeople are housed, to do the same. That is a real point, especially in rural districts, which the Chancellor of the Exchequer might well ponder.

6.0 p.m.

Mr. I. J. Pitman: In some ways, I regret that I did not catch your eye sooner, Mr. Deputy-Speaker, because I think I could have cleared up what was, I submit, a misunderstanding by the learned Solicitor-General of what my right hon. Friend the Member for the Scottish Universities (Sir J. Anderson) was saying. My right hon. Friend was trying to make a point which, as I say, was clear, but was misunderstood. I started my sentence by saying that I thought the learned Solicitor-General had misunderstood what was said. My right hon. Friend propounded the story of two adjoining houses. The whole point at issue is that the difference between the gross assessment and the net assessment, which is the notional figure allowed for repairs to the householder who is a tenant doing repairs, is very often totally insufficient, and then a situation arises which is very unfair on the tenant. In a similar situation, if the landlord is doing the repairs, or if the tenant has been a tenant for more than 50 years, the benefit, for Income Tax purposes, of the cost of repairs, due to some piece of bad luck, would not fall on the short lease-holding tenant as the law is at present. This Amendment is an endeavour to right that obvious wrong.
I speak from experience. Drains can be a most expensive form of repair. It is extraordinarily bad luck, but if a tenant paying a fair rent for a house, having regard to the fact that he has to do repairs, the allowance in respect of repairs allowed to him is, in effect, the difference between the gross and the net assessments. There can be cases in which the actual repairs come to many hundred of pounds more than the notional amount allowed, and that is the issue we are considering,


not the one put by the learned Solicitor-General. I want hon. Members opposite to appreciate that this is in the interest of the tenant and not of the landlord.
In the case of many small cottages, particularly if they are in quantity, the landlord has to do repairs because they will not otherwise get done. In this case, the landlord is getting the benefit of maintenance. I want hon. Members opposite to believe me when I say that there are cases of small men who let a cottage to other small men with the repairs falling on the tenant. It is very unfair that, where the repairs are considerable, the difference between the notional and the actual repairs should fall on the tenant without any Income Tax benefit, whereas, if they were falling on the landlord, he would get the Income Tax benefit. That is the purpose of this Amendment.

Mr. Beechman: In a very few words, I wish to express my regret that the hon. and learned Solicitor-General has not, on behalf of the Government, found it possible to grant the relief we are suggesting. I understand that the matter will he considered, but I should like to have heard now that the consideration was going to be a favourable one. In Cornwall, we have a number of leases based on third parties. It is a peculiar system and one which very often involves a considerable hardship for the tenant, who is quite uncertain for how long the lease is going on because it terminates when the life of some third party comes to an end. For this special reason, as well as for those already stated, I should like to have seen this relief given to the tenant.

Lieutenant-Commander Joynson-Hicks: I am very glad that my hon. Friend the Member for Bath (Mr. Pitman) has been able to clear up the misunderstanding which the learned Solicitor-General threw about the House. I rather suspected that there must be some misunderstanding to be cleared up, as we have not heard from the hon. Member for South Cardiff (Mr. Callaghan) on the subject. Not having been in his place a little earlier, he was not in time to hear the speech of the learned Solicitor-General. I cannot accept the argument as to the effect of the incidence of Schedule A upon the beneficial owner. But even if one were able to accept it, surely there could he no objection to the acceptance of the

provisions of this Amendment because they would not adversely affect the receipts of the Treasury? If the Treasury is not going to suffer, surely it cannot object to extending the relief in order to right a wrong which has been pointed out?
Personally, I should like to go further, and abolish Schedule A altogether. But this is a step in the right direction because the incidence of this tax does not really fall where Income Tax was originally intended to fall. As I understand it, the origin of Income Tax, including Schedule A, or particularly with regard to Schedule A. was a tax upon income or upon the notional income that the value of a house represented. In this particular case, where the value of the living accommodation is reduced to the tenant by the fact of his having to bear the cost of repairs, it is only fair that, as in the case of the landlord, he should be entitled to benefit by setting off the expense of repairs up to the limit of the tax which the house represents, or the notional income which the house should produce represents.
There is one argument which has not so far been advanced, and one which I think should appeal to the Government. The majority of cases with which this particular Amendment deals concern the larger type of house. It is not so much the cottage upon which the tenant has to bear the cost of repair; it is generally the house with the longer lease, which is larger than the cottage. In those cases, the present occupants are having very great difficulties indeed. In practically all those cases the incomes of the tenants have been reduced, but in this case where they are also liable for the cost of the repairs, the cost of the repairs has gone up, and in addition to that, the tax has increased as well. Therefore, they are hit in all directions. It is no longer profitable, and in many cases it is no longer convenient, for them to be able to occupy the whole of a house, but owing to the reduction in their income, caused partly by the increase in taxation, they are unable to incur the expense which would be involved in dividing the house into two or more habitations which would result in the increase of accommodation and would also enable them to live more within their income. If, in making such alterations to the house, it were possible for the cost of the necessary repairs to be counted as a deduction against their income tax, the


money would not have to be found out of their net income, and it would be a substantial encouragement to people to increase the amount of accommodation which at present is available in the houses which are nowadays too large for one family to live in alone, but which are unable to be converted.

Mr. Diamond: Would the hon. and gallant Gentleman tell us whether he is talking about maintenance expenditure, or capital expenditure in respect of which the relief is not allowable to landlord or tenant?

Lieut.-Commander Joynson-Hicks: I am talking about the words in the new Clause:
which grants reliefs in respect of maintenance, repairs, insurance and management of property.
I will not detain the House further, but I do wish to urge upon the Treasury, and upon the Chancellor in particular, that there is in this whole question of Schedule A a very real line for him to pursue, and I believe that this relief for which we are asking will be a very good starting ground for him.

Mr. Assheton: My noble Friend the Member for Southern Dorset (Viscount Hinchingbrooke) has done the House a good service in moving this Clause, because it has given an opportunity for discussing a subject which, although bristling with technical difficulties, demands serious consideration by the Government. The learned Solicitor-General put his case quite clearly, but I do not think he yet appreciates the full force of the case which we have put from this side of the House. I do not feel that I can make this very technical subject crystal clear. My right hon. Friend the Member for the Scottish Universities (Sir J. Anderson) did make his point crystal clear, and I would like to ask the Solicitor-General, in connection with the case which my right hon. Friend put, for example, in the case of a medium term lease entered into between parties some years ago, when the cost of repairs was much lower and when the rate of Income Tax was much lower, whether there is not a case there which needs further examination and a more detailed reply than the hon. and learned Gentleman gave us.
I think it is not fully appreciated that where, in the case of the landlord, the whole of his income is eaten up by repairs, no tax is payable, but the tenant does not find himself in quite the same position. I think one good thing will -come of this Debate, if it is possible for the Press to find room for it tomorrow, and that is that tenants may learn what their rights are under Rule 8, No. V, Schedule A. I only learned what my rights were in this matter by chance. It so happens that, as an owner, I knew something about maintenance claims:in agricultural property, and when I became a leasehold tenant when I came to London some years afterwards, I asked myself how it was that something of this sort did not apply in the case of tenants with repairing leases. I inquired and found that it did apply, but few of my neighbours were aware of the fact. Therefore, I hope that whatever else may come of this Debate, many people who have not heard of this particular form of relief will acquaint themselves with it and will take advantage of it. The Solicitor-General did not give us much encouragement about next year. He has rejected this new Clause, and we on this side of the House do plead, after the cogent case put forward, that rather more serious consideration will be given to the case before next year. I hope the Chancellor will undertake to give that consideration.

6.15 p.m.

Mr. Dalton: I am sure the Opposition would like to go to a Division on this Clause, and I do not wish to delay them. I have listened with great attention to what is a difficult topic, and, although as at present advised it does not seem to me that this Clause should be accepted, I undertake to put this question on the list —it is not a short list—of matters to which I will apply my mind between now and next year. There may be other ways of dealing with this matter. Schedule A has been referred to, and I may approach the question from that angle. However, I do not want to dissuade the Opposition from dividing the House.

Mr. Leslie Hale: I urge the Chancellor to consider this matter more seriously before he gives any more undertakings.

Mr. Dalton: I have given no undertaking.

Mr. Hale: I know, but my right hon. Friend has given the pious promise of further consideration, which makes it incumbent upon me to advance one other argument. The noble Lord the Member for Southern Dorset (Viscount Hinchingbrooke) made out a modest and proper case for this Clause, but the arguments which he put forward were exploded by the hon. Member for Torquay (Mr. C. Williams). I always listen to the hon. Member with fascination, if not with exhilaration. So far as I was able to trace his argument, it was reminiscent of the lady who wrote to Sir Robert Ball and said, "I am sorry, I cannot attend your lecture on sun spots. The fact is, I am liable to freckle so easily." I have been a practising solicitor for 20 odd years, and I have drawn leases and tenancy agreements in four counties, but I have never drawn one which would come within the terms of this Clause. When the noble Lord was submitting his case it occurred to me that there might be a special practice in Dorset. There are various leasehold practices in different counties. For instance, Kent has a special practice. It occurred to me that a special case might be put forward for a particular locality, but when the hon. Member for Torquay said that the acceptance of this Clause would affect many cases and it would be of tremendous importance to tenants up and down the country, he exploded the noble Lord's argument and showed that would, in fact, happen.

Mr. C. Williams: If I am allowed to make a second speech, may I say that I could give the hon. Gentleman cases ranging from London to Scotland and from Scotland to Penzance? There are a number of them in different areas.

Mr. Hale: That may be, but if it is going to affect a large number of different cases, it will be for the reason put forward by one of my hon. Friends who spoke a little earlier. The landlord will dictate as a term of the lease that there shall be a complete obligation on the tenant to take over the whole cost of repairs. At the moment, in the ordinary lease of an ordinary house, the tenant does indoor repairs and the landlord does external repairs. There are special clauses. I contend that this would mean that the tenant would be forced to accept an additional obligation, in circumstances when the housing position means that he cannot bargain too closely about the rent. For

that reason, I ask the Chancellor to consider this matter carefully before he makes any concession.

Viscount Hinchingbrooke: In view of the undertaking given by the Chancellor that he will look into the terms of this proposed new Clause, and review the Debate we have had upon it, I beg to ask leave to withdraw the Motion.

Motion and Clause, by leave, withdrawn.

CLAUSE 2.—(Coffee and chicory extracts, etc.)

Mr. Lennox-Boyd: I beg to move, in page 2, line 15, to leave out "7½d.," and to insert "3d."
We are now dealing with that part of the Finance Bill which concerns the import of coffee essences. As the House will remember, under the Bill the statutory prohibitions on the import of coffee essences will come to an end, and in their place we are to have duties, with Imperial Preference. The Chancellor took credit for this, and said that he had always supported Imperial Preference, and had even, on one occasion at least, given a rebellious vote for it. As the overwhelming bulk of imports from the Dominions and Colonies are foodstuffs, and always have been, and as Imperial Preference demands a tax on foodstuffs which can be partially lifted in favour of the Colonies or Dominions, we on these benches are a little puzzled to reconcile this longterm loyalty on the part of the Chancellor with the frequent jibes that the bulk of the Government have made at the Opposition, of being food taxers. Perhaps the knowledge that his own Government would not only reduce the size of the loaf, but would also ration it, may have had something to do with persuading the Chancellor 20 years ago to adopt a more generous attitude in our approach to Imperial Preference. I and my colleagues are glad to welcome one right hon. Gentleman opposite to the support of Imperial Preference. We hope he will show to the United States the same resolution and toughness as he says he showed to his own party Whip, and to the late Lord Snowden in regard to Imperial Preference.
We are very anxious that the Imperial Preference conceded by this proposal, which we welcome, should be a reality


and not a sham. I believe the Chancellor—his words certainly justify this belief—is himself anxious that this preference should be a reality. Some hon. Members may know that at the present moment we have, under a previous Finance Act, two forms of duty on coffee imports. There is the duty on roasted coffee, and the ordinary duty on raw coffee. In regard to the duty on roasted coffee, we have an Imperial Preference of one-sixth. As to the duty on raw coffee, we have an Empire Preference of two-thirds.

Mr. Scollan: Does the hon. Gentleman mean ground coffee, or coffee beans?

Mr. Lennox-Boyd: By "roasted coffee," I mean coffee that has been treated in any way at all. By "raw coffee" I mean ordinary coffee, untreated. The duty on roasted coffee, or coffee treated in any other way, gives a preference of one-sixth, and the duty on raw coffee gives a preference of two-thirds. The Government having solved a technical problem which has puzzled the experts of the Treasury for the last 70 years—our own explanation is slightly more cynical than that—we are now concerned, for the first time in our history, in applying a duty on coffee essences. On the duty of the Chancellor, this preference on coffee essences is to be at the lower level; that is, at the roasted coffee level of one-sixth. The effect of our Amendment would be to raise that duty from one-sixth to two-thirds; that is to say, to raise it from the preference on roasted coffee to the preference on raw coffee. This matter has been twice discussed in the House already. In the Debate on 17th April, the Chancellor used these words:
We are applying the preferential rebate of one-sixth on Empire products…which is the same as the rebate now applied on coffee itself. [OFFICIAL REPORT, 17th April, [946; Vol. 421, C. 2742.]
No doubt quite unintentionally, that did, in part, mislead some hon. Members, including myself, because I do not think most hon. Members realised that we have two rates of Imperial Preference, one applying on raw coffee and one on roasted coffee. For the preference that the Chancellor has granted, the one-sixth preference is a preference on roasted coffee but not on raw coffee. Later on, in the second Debate which we had, on 19th June, the

Chancellor, after listening to the arguments that had been advanced in favour of widening the Imperial Preference margin, said he would look into the matter and see if, in the light of our treatment of comparable products, any further preference could be granted.
Personally—and I would be interested to know the answer—I do not see why the preference on roasted coffee should be very considerably less than the preference on raw coffee. At first sight, it would appear that the method we have now adopted puts a premium on foreign imports, and puts Empire imports which have been processed at a certain disadvantage. It has not mattered very much in the past, because the imports of roasted coffee have been negligible; but it does matter now that we are applying this scale of duty and preference to imports of coffee essence. I hope the Chancellor will be able to meet this very modest but, I think, justifiable claim now, and not add it to the list of those other claims which he will consider in the course of the next 12 months. After all, I believe this represents the first case of Imperial Preference granted by a Socialist Government with full power. If the Chancellor is, as he claims to be, the real friend of Imperial Preference, and has been for many years, this is a very signal opportunity for him to make that preference a reality.
In the earlier Debates, grave doubts were expressed on this side of the House, as we were lifting the ban on coffee essences and allowing imports limited only by duty. It was freely suggested that it was due to pressure from outside. I do not think many hon. Members doubted but that the United States Government had represented to our Government that a complete prohibition of coffee essence imports was contrary to the new spirit of international trade. If, in fact, this change in our general import practice has been brought about by American pressure, I very much hope that giving the lower rate of preference for coffee essence imports to the Dominions and the Colonies has not also been brought about by American pressure. It would, I think, be a very improper thing if the Government did not settle this question on its merits, but allowed any regard for foreign nations, however anxious they may be to hold their goodwill in the international field, to interfere with what


they believe to be right, judged by our own Imperial responsibility. I hope the right hon. Gentleman will be able to clear my mind of that doubt, and will be able to concede this point and give the higher rate of preference to essences imported from the Dominions and the Colonies.

Mr. Scollan: The Amendment is to leave out "7½d" and to insert "3d." During the course of the hon. Member's speech he has not given us a single iota of evidence why it should be 3d. Could the hon. Gentleman give us some supporting arguments why it should be 3d? Why should not it be 2d?

Mr. Lennox-Boyd: If the hon. Gentleman would spend as much time b listening to speeches made in this House as he does to preparing his interruptions, I think he would have followed my argument. The point of leaving out "7½." and substituting "3d." was to bring it into line with the two-thirds preference now given to raw coffee, as opposed to the one-sixth preference. The bulk of my speech was devoted to making that clear.

Mr. Scollan: That is no justification at all for changing it.

Mr. Lennox-Boyd: Perhaps the hon. Member will go away to the Library and work out that 3d. on a duty of 9d. represents a preference of two-thirds, whilst 7½d. represents a preference of one-sixth.

Mr. Scollan: That is not the point at all. The point is, how is the figure arrived at with justification? It is obvious to me the hon. Member has not gone into the question why there should be taxation of this kind at all.

Mr. Speaker: We cannot argue this matter now.

Mr. Bowles: On a point of Order. The Question has not yet been proposed.

6.30 p.m.

Mr. Nigel Birch: I beg to second the Amendment.
I am afraid I cannot oblige hon. Gentlemen opposite by going into the whole question of taxation. No very fundamental issue arises on this very small Amendment, and I do not want to detain the House long, but there are one or two points I should like to raise. This Clause

now appears to be becoming rather more actual; as the House will remember, we were told before, that, in fact, no import licences would be granted, but it may be, now we have the American Loan, that import licences will be granted and chicory essences may be among the articles we are now promised. I therefore ask the Chancellor to think the matter over more seriously than he did before. I cannot see that it is at all unreasonable that the preference on coffee and chicory essences should be the same as it is on imported raw coffee. Rather, one could give very good reasons why it should be higher, but I cannot see why it should not be given at least the same preference. Not to put on a reasonable preference when we are about to enter upon international negotiations would be very foolish. Perhaps we shall be faced with a country which, in the course of these negotiations, will say "We are protected by a six-barred gate and we are prepared to take off the top bar," while we shall be in the position of saying "We are protected only by a very low hedge, and we are not really on equal terms." I, therefore, think that it is extremely foolish at this particular moment to put on a lower duty than would otherwise be reasonable, when we are going into negotiations with countries whose tariffs are immensely higher than our own.

Mr. Scollan: I asked the hon. Gentleman why, in his Amendment, he had left it at 3d. and my reason for doing so was this. If I were putting the case for 3d. instead of 7½d., I would do it for the purpose of showing that, in some way, those who go in for the manufacture of coffee essences in this country would be placed at an advantage, or were now placed at a disadvantage, and I would produce some figures to show that. Obviously you cannot treat this in the same fashion as you would treat the raw material. It so happens that I have some knowledge of the making of coffee essences, and obviously you do not want to put the same figure on the raw material as on the finished article coming in. If there is any advantage in this kind of tax at all, it is that it enables manufacturers in this country to compete on favourable terms against those who send imports into this country.

Mr. Lennox-Boyd: Is the hon. Gentleman not aware that that is precisely what


the Government are doing? They are, in fact, imposing the same rate of preference on the finished article as on one form of the raw material, which happens to be roast coffee, and not on the other form. We are anxious to discover why they have not done it, on the more generous level.

Mr. Scollan: Is it not perfectly obvious? One level is imposed on the raw material, and the other on the finished article.

Mr. Lennox-Boyd: They are both raw materials.

Mr. Scollan: No, they are not. That is the trouble; hon. Members get up and talk on a subject about which they are not informed. They are not the same. Coffee comes into this country, as raw material, in the shape of coffee beans. When the beans are split and ground, you have something in the nature of the finished article. But making coffee essence is an entirely different process. Therefore, before making proposals of this character, I should want to know exactly what the process would be and what benefits would be obtained. The whole burden of the hon. Gentleman's argument has been that he wants the change to be made because the rate he proposes already applies to something else. That is no justification for it at ail, and I think the hon. Member might at least treat the House with some respect, by studying the subject before getting up to speak upon it.

Mr. Dalton: It is always very valuable when we get practicable knowledge applied to these arithmetical questions. I am much obliged to my hon. Friend for the observations he has made. I have no wish other than to ask the House to settle this question on its merits, and I hope that by giving a few facts from the past development of this matter, I shall be able to show that one-sixth is the right proportion, and that this Amendment should therefore not be accepted.
I think it was the hon. Member for Hertford (Mr. Walker-Smith)—who is not here at the moment—who raised the matter in an earlier Debate. He suggested that if the various products, chicory and so on in various stages of completeness were compared, it would be found that one-sixth was too low and that two-thirds would be about right. The history of the matter is that in the Finance Act of 1919 one-sixth was adopted as
being the preferential margin for practically the whole range of foodstuffs then affected. There have been various changes since 1919 in the preferential margins and in the range of goods admitted to preference, but at the present time the position is that the proportion of one-sixth applies to cocoa—I am only taking it as a similar or kindred article—it applies to coffee which is kiln dried, roasted or ground; it applies to coffee and chicory roasted and ground, mixed; it applies to chicory raw or kiln dried, and it applies to chicory roasted or ground. The one case which stands at two-thirds is raw coffee.
I think, therefore, there is reason to say, when we are introducing this new item into the preference list, that after all these essences are very nearly finished products—they only need, I suppose, the addition of hot water or whatever is required to make it the finished product—and that, if import licences are to be granted, the product belongs more to the range of finished products than to the raw coffee category. I can assure the House, however, that it is not at present intended to grant import licences. Moreover, it was in 1932, when the Ottawa discussions took place, that raw coffee was singled out from the rest of this list and the preference was raised from one-sixth to two-thirds. Up to that time it had been one-sixth for all categories. Since 1932 it has been one-sixth for all except raw coffee, and I hope the House will accept that it is not unreasonable to give the higher preference to the material more nearly in the raw state.
I would, therefore, suggest that, having regard to what has been done in other cases, one-sixth is the proper figure. Although this matter was ventilated at an earlier stage by the hon. Member for Hertford, I would add that no representations have been made to the Treasury from any interested parties. No one has represented to us that their interests are being adversely affected as a result of the lower preference being given. Indeed, it might be argued—though I do not stress this, I hope I have made the case already —that if the preference were raised as suggested it might conceivably adversely affect home manufactures. I hope it would not, but it might be argued that it would. The short argument is that, having regard to the preference on these other articles of a kindred character, and having


regard to the history of the matter, I have satisfied myself by a study of the facts, as I promised to do, that one-sixth is the proper figure.

Mr. Oliver Stanley: The short Debate we have had on this subject has been notable for one thing, at any rate. We have now found what we on this side of the House have long been searching for, namely, what is the special subject of the hon. Gentleman the Member for West Renfrew (Mr. Scollan). We have heard him speak on many subjects on which he has, obviously, not been an expert. Now we know that on the question of the manufacture of chicory essence we shall find him able and willing to advise the House. But I confess I was not very much impressed by the argument of the right hon. Gentleman the Chancellor of the Exchequer. I could have understood it, in fact, had it been left at the case made by the hon. Member for West Renfrew—that there was a logical pattern which ran through these duties, and that one-sixth was the appropriate preference in respect of prepared articles, and that two-thirds was appropriate in respect of wholly raw material. But as soon as the Chancellor of the Exchequer began to give us the list, we found, of course, that that logical pattern did not exist, because, in fact, the only thing that gets two-thirds is raw coffee, whereas raw chicory—the subject of the hon. Member for West Renfrew—only gets one-sixth. Raw cocoa, I understand, gets only the same. We, therefore, cannot decide this thing on any logical conclusion at all, because there is no logic in the present system of duties. We, therefore, do say that, starting from that basis, the right hon. Gentleman had much better abandon logic, and substitute generosity; and that, at this present moment, when coming events have cast an ominous shadow over certain of our inter-Imperial economic relationships, generosity of this kind by the Chancellor of the Exchequer might do good far beyond the comparatively minor significance of the actual Amendment we are moving.

Mr. Scollan: On the point of the differentiation between the finished article after manufacture in this country, and the raw material, I should have thought that would have been obvious to the right hon. Gentleman that its substitution for

tea, which carries very heavy taxation, would have been an additional reason. Additional taxation on the finished article was proposed to give a chance for creating a new industry in this country.

Mr. Stanley: I was most impressed when the hon. Gentleman made that speech the first time. But his whole case was then destroyed by the Chancellor of the Exchequer, and it is for that reason that, I think, we had much better abandon logic, which, I agree, is with the hon. Gentleman, and appeal to the Chancellor of the Exchequer for generosity.

Mr. James Hudson: There has been a tendency during this Debate to assume that everybody in this House is prepared to accept the whole process of Imperial Preference as the right sort of thing to apply in taxation of this sort before us. I should like to remind right hon. and hon. Gentlemen, who take that attitude, that I, for one, some years ago, when this question of Imperial Preference was discussed, was opposed to it utterly in principle. I remain utterly opposed. I think, after what the right hon. Gentleman the Member for West Bristol (Mr. Stanley) has just said, that if the only way to get a concession with regard to this matter is on the basis of generosity, there is—

Mr. Stanley: I do not want to be misunderstood. The right hon. Gentleman and I are wholly at one with regard to the merits of Imperial Preference. The only dispute between us is just the small thing: what is the amount that is to be charged? I am not saying that the only argument for Imperial Preference is, that there is no logic in the Chancellor's case.

Mr. Hudson: It is precisely when we get into this sort of difficulty in deciding the amount of taxation in order to give Imperial Preference, that one is driven, as the right hon. Member for West Bristol has been driven, to base his case merely on generosity. There is no logic in the matter. This is a process of logrolling in the matter of taxation, to which we used to take the strongest objection in the years gone by when hon. and right hon. Gentlemen on that side were pushing forward these principles of Imperial Preference. I shall not now go into the whole issue of Imperial Preference, because this is not the time for it. I feel, however, that this little interlude by the right hon. Member for West Bristol may, perhaps,


lead some hon. Members on this side of the House to reconsider the whole of this issue. A great mistake has been made in connection with this matter since the days of Ottawa. I hope that, because something was done at Ottawa, and that in those days some support was given to Ottawa by hon. Members on this side, we are not assumed to be satisfied that these taxes should remain. I am very glad the concession has been made by the

Chancellor of the Exchequer in his Budget. I want to hold on to the concession and use it. [HON. MEMBERS: "What concession?"] The concession of the lower preference, which will be used, I hope, later on, to get rid of the preferences entirely.

Question put, "That '7½d.' stand part of the Bill."

The House divided: Ayes, 239; Noes, 131.

Division No. 250.]
AYES
6.45 p.m.]


Adams, Richard (Balham)
Durbin, E. F. M.
Medland, H. M.


Adams, W. T. (Hammersmith, South)
Dye, S.
Mosser, F.


Allen, A. C. (Bosworth)
Edwards, John (Blackburn)
Middleton, Mrs. L.


Allen, Scholefiold (Crewe)
Edwards, N. (Caerphilly)
Mikardo, Ian


Allighan, Garry
Evans, E. (Lowestoft)
Millington, Wing-Comdr. E R


Alpass, J. H,
Follick, M.
Mitchison, Maj. G. R.


Anderson, A. (Motherwell)
Foot, M. M.
Monslow, W.


Attewell, H. C.
Forman, J, C.
Montague, F.


Austin, H. L.
Freeman, Maj. J. (Watford)
Moody, A. S.


Awbery, S. S.
Ganley, Mrs. C. S.
Morgan, Dr. H. B.


Ayles, W. H.
Gibbins, J.
Morris, P. (Swansea, W.)


Ayrton Gould, Mrs. B
Gilzean, A.
Mort, D. L.


Bacon, Miss A.
Glanville, J. E. (Consett)
Murray, J. D.


Balfour, A.
Goodrich, H. E.
Nally, W.


Barstow, P. G.
Gordon-Walker, P. C.
Naylor, T. E.


Barton, C.
Greenwood, A. W. J. (Heywood)
Neal, H. (Claycross)


Batlley, J. R
Grenfell, D. R.
Nichol, Mrs. M. E. (Bradford, N.)


Bechervaise, A. E.
Griffiths, D. (Rother Valley)
Nicholls, H. R. (Stratford)


Bellenger, F. J-
Gunter, Capt. R. J.
Noel-Buxton, Lady


Benson, G.
Guy, W. H.
Oldfield, W. H.


Bing, G. H. C.
Hale, Leslie
Paling, Rt. Hon. Wilfred (Wentworth)


Binns, J.
Hall, W. G. (Colne Valley)
Palmer, A. M. F.


Blenkinsop, Capt. A.
Hamilton, Lieut.-Col. R
Pargiter, G. A.


Boardman, H.
Hardy, E. A.
Parkin, Flt.-Lieut. B. T.


Bowles, F. G. (Nuneaton)
Harrison, J.
Paton, Mrs. F. (Rushcliffe)


Braddock, Mrs. E. M. (L'pl, Exch'ge)
Hastings, Dr. Somerville
Paton, J. (Norwich)


Braddock, T. (Mitcham)
Haworth, J.
Pearson, A.


Brook, D. (Haifax)
Henderson, A. (Kingswinford)
Peart, Capt. T F.


Brooks, T. J. (Rothwell)
Hicks, G.
Perrins, W.


Brown, George (Belper)
Hobson, C. R.
Porter, G. (Leeds)


Brown, T. J. (Ince)
Holman, P.
Pritt, D. N.


Buchanan, G.
Holmes, H. E. (Hemsworth)
Proctor, W. T.


Burden, T. W.
House, G.
Pursey, Cmdr. H.


Burke, W. A.
Hoy, J.
Randall, H. E.


Callaghan, James
Hudson, J. H. (Ealing, W.)
Ranger, J.


Castle, Mrs. B. A.
Hughes, Hector (Aberdeen, N.)
Rees-Williams, D. R.


Chamberlain, R. A.
Irving, W. J.
Reeves, J.


Champion, A. J.
Isaacs, Rt. Hon. G. A.
Reid, T. (Swindon)


Chater, D.
Jeger, G. (Winchester)
Rhodes, H.


Chetwynd, Capt. G. R.
Jones, D. T. (Hartlepools)
Richards, R.


Clitherow, Dr. R.
Jones, J. H. (Bolton)
Ridealgh, Mrs. M


Clue, W. S
Jones, P. Asterley (Hitchin)
Robens, A.


Cobb, F. A.
Keenan, W.
Robertson, J. J. (Berwick)


Cocks, F. S.
Kendall, W. D.
Rogers, G. H. R


Coldrick, W.
Kenyon, C.
Royle, C.


Collick, P.
Kinley, J.
Sargood, R.


Collindridge, F.
Kirby, B. V.
Scollan, T.


Collins, V. J.
Lawson, Rt. Hon. J. J
Scott-Elliot, W.


Colman, Miss G. M.
Leonard, W.
Shackleton, Wing-Cdr. E. A A


Comyns, Dr. L.
Levy, B. W.
Sharp, Lt.-Col. G. M.


Cooper, Wing-Comdr. G.
Lewis, A. W. J. (Upton)
Shurmer, P.


Corlett, Dr. J.
Lindgren, G. S.
Silverman, S. S. (Nelson)


Crossman, R. H. S.
Lyne, A. W.
Simmons, C. J.


Daggar, G.
McAdam, W.
Skeffington, A. M.


Davies, P.
McEntee, V. La T.
Skeffington-Lodge, T. C


Dalton, Rt. Hon. H.
McGhee, H. G.
Skinnard, F. W.


Davies, Edward (Burslem)
Mack, J. D.
Smith, Capt. C. (Colchester)


Davies, Ernest (Enfield)
Maclean, N. (Govan)
Smith, H. N. (Nottingham, S.)


Davies, Harold (Leek)
McLeavy, F.
Smith, S. H. (Hull, S.W.)


Davies, R. J. (Westhoughton)
Macpherson, T. (Romford)
Smith, T. (Normanton)


Deer, G.
Mainwaring, W. H.
Snow, Capt. J. W.


Diamond, J.
Mallalieu, J. P. W.
Solley, L. J.


Dobbie, W.
Manning, Mrs. L. (Epping)
Sorensen, R. W.


Dodds, N. N.
Mathers, G.
Soskice, Maj. Sir F.


Dumpleton, C. W.
Mayhew, C. P.
Sparks, J. A.




Stamford, W.
Ungoed-Thomas, L.
Wilkes, Maj. L.


Steele, T.
Vernon, Maj. W. F.
Wilkins, W. A.


Stewart, Capt. Michael (Fulham, E.)
Viant, S. P.
Willey, F. T. (Sunderland)


Swingler, S.
Walkden, E.
Willey, O. G (Cleveland)


Taylor, H. B. (Mansfield)
Walker, G. H.
Williams, D. J. (Neath)


Taylor, R. J. (Morpeth)
Wallace, G. D. (Chislehurst)
Williams, J. L. (Kelvingrove)


Taylor, Dr. S. (Barnet)
Wallace, H. W. (Wallhamstow, E.)
Williams, W. R. (Heston)


Thomas, I. O. (Wrekin)
Warbey, W. N.
Willis, E.


Thomas, John R. (Dover)
Watkins, T. E.
Wise, Major F. J


Thomas, George (Cardiff)
Weitzman, D.
Woodburn, A.


Thorneycroft, H (Clayton)
Wells, P. L. (Faversham)
Woods, G. S.


Thurtle, E.
Wells, W. T. (Walsall)
Wyatt, Maj. W.


Tiffany, S.
White, H. (Derbyshire, N.E.)



Titterington, M. F
Whiteley, Rt. Hon. W.
TELLERS FOR THE AYES


Tolley, L.
Wigg, Col. G. E.
Mr. Joseph Henderson and


Turner-Samuels, M
Wilcook, Group-Capt. C. A. B
Mr. Hannan




NOES


Allen, Lt.-Col. Sir W (Armagh)
Hope, Lord J.
Roberts, Emrys (Merioneth)


Anderson, Rt, Hn. Sir J. (Scot Univ.)
Howard, Hon. A
Roberts, W. (Cumberland, N.)


Assheton, Rt. Hon. R
Hurd, A.
Robertson, Sir D. (Streatham)


Astor, Hon. M.
Hutchison, Lt.-Cm. Clark (E'b'rgh W.)
Robinson, Wing-Comdr. Roland


Baldwin, A. E.
Jeffreys, General Sir G.
Ross, Sir R.


Beamish, Maj T. V. H
Joynson-Hicks, Lt.-Cdr Hon. L. W
Savory, Prof. D. L.


Beechman, N. A
Keeling, E. H.
Shephard, S. (Newark)


Bennett, Sir P.
Kingsmill, Lt.-Col. W. H.
Shepherd, W. S. (Bucklow)


Birch, Nigel
Lambert, Hon. G.
Smiles, Lt.-Col. Sir W.


Bowen, R.
Legge-Bourke, Maj. E. A. H
Smith, E. P. (Ashford)


Bower, N.
Lennox-Boyd, A. T
Smithers, Sir W.


Boyd-Carpemer, J A.
Linstead, H. N
Spearman, A. C. M.


Braithwaite, Lt.-Comdr. J. G.
Lipson, D. L.
Stanley, Rt. Hon. O.


Bromley-Davenport, Lt.-Col. W
Low, Brig. A. R. W
Stewart, J. Henderson (Fife, E.)


Buchan-Hepburn, P. G. T.
Lucas-Tooth, Sir H.
Stoddart-Scott, Col. M.


Butcher, H. W.
MacAndrew, Col. Sir C.
Strauss, H. G (English Universities)


Byers Lt.-Col. F
Macdonald, Capt, Sir P. (I. of Wight)
Stuart, Rt. Hon. J. (Moray)


Challen, C.
Mackeson, Lt.-Col. H. R.
Studholme, H. G.


Clarke, Col. R. S.
Mckie, J. H. (Galloway)
Taylor, C. S. (Eastbourne)


Clifton-Brown, Lt.-Col. G.
Macmillan, Rt. Hon. Harold (Bromley)
Taylor, Vice-Adm. E. A (P'ddt'n, S.)


Corbett, Lieut.-Col. U. (Ludlow)
Macphersan, Maj. N. (Dumfries)
Teeling, William


Crookshank, Capt. Rt. Hon. H. F. C
Maitland, Comdr. J. W.
Thorneycroft, G. E. P. (Monmouth)


Crosthwaite-Eyre, Col. O. E.
Manningham-Buller, R. E
Thornton-Kemsley, C. N.


Darling, Sir W. Y.
Marples, A. E.
Thorp, Lt.-Col. R. A F


De la Bére, R.
Marshall, D. (Bodmin)
Touche, G. C.


Dodds-Parker, A. D.
Marshall, S. H. (Sutton)
Turton, R. H.


Donner, Sqn.-Ldr. P. W.
Medlicott, F
Vane, W. M. T.


Drayson, Capl. G. B.
Mellor, Sir J.
Wadsworth, G.


Dugdale, Maj. Sir T. (Richmond)
Molson, A. H. E.
Wakefield, Sir W. W


Duthie, W. S.
Morris-Jones, Sir H.
Walker-Smith, D.


Eccles, D. M.
Morrison, Maj. J G. (Salisbury)
Ward, Hon. G. R.


Fletcher, W. (Bury)
Morrison, Rt. Hn. W. S. (Cirencester)
Watt, Sir G. S. Harvie


Gage, Lt.-Col. C.
Neven-Spence, Sir B
Webbe, Sir H. (Abbey)


Galbraith, Cmdr. T. D
Orr-Ewing, I. L.
Wheatley, Colonel M. J


George, Maj. Rt. Hon. G. Lloyd (P'ke)
Osborne, C.
White, J. B. (Canterbury)


George, Lady M. Lloyd (Anglesey)
Peake, Rt. Hon. O.
Williams, C. (Torquay)


Glossop, C. W. H
Peto, Brig. C. H. M
Williams, Gerald (Tonbridge)


Glyn, Sir R.
Pickthorn, K.
Willink, Rt. Hon. H. U.


Gridley, Sir A.
Pitman, I. J.
Willoughby de Eresby, Lord


Grimston, R. V.
Ponsonby, Col. C. E.
York, C.


Hannon, Sir P. (Moseley)
Poole, O. B- S. (Oswestry)
Young, Sir A. S. L. (Partick)


Hare, Lieut.-Col. Hon. J. H. (W'db'ge)
Prescott, Stanley



Harvey, Air-Comdre. A. V.
Raikes, H. V.
TELLERS FOR THE NOES


Headlam, Lieul.-Col. Rt. Hon. Sir C
Reid, Rt. Hon. J. S. C (Hillhead)
Mr. Drewe and Major Conant


Holmes, Sir J. Stanley (Harwich)
Renton, D

CLAUSE 6.—(Reduction of entertainments duty on certain games and sports, etc.)

Mr. Dalton: I beg to move, in page 4, line 3, after "vehicles," to insert "motor."
The purpose of this Amendment might not be obvious from the words employed, except to the hon. Member for Bodmin (Mr. D. Marshall), who is so expert on these matters, and who initiated the line of thought which has now run on to the Order Paper. The purpose is to extend to

sailing vessels the benefit of the reduced rate of entertainments duty; that is the purpose of this Amendment, and the subsequent Amendment which is consequential to it. A good case was made out during the Committee stage for bringing sailing vessels and entertainment provided by races between sailing vessels on to the lower level. I hope that it will not be necessary to debate the matter at great length, because I have done here what I undertook to do at an earlier stage. I was asked whether the provision could be


extended also to racing by motor boats, but I am unable to do that at this moment. There seems to me to be a special case for favourable treatment for sailing vessels and regattas involving races between sailing vessels, having regard to national necessity for a seafaring population. The manipulation of motors, whether on sea or on land, is a different question, and I do not think that this falls into the same category of urgency. I hope that the House will think it is right to discriminate in regard to sailing vessels, and that they should benefit from the reduced rates.

Mr. Douglas Marshall: During the Committee stage I asked the Chancellor whether he would consider removing the word "vessels" in Clause 6. Quite naturally I had hoped that he would remove the word "vessels," as this then would have given the benefit to all vessels. But in moving my Amendment I stressed sailing vessels, and it was sailing vessels with which I was particularly concerned and, therefore, I am extremely glad that the Chancellor has included the word "motor", which will give sailing vessels the full benefit. There is one point I should like to make. At the end of my speech I referred to large vessels which had been launched going down the Clyde, the Mersey, or the Tyne on trial, but not necessarily on speed trial. I would like the Chancellor to give an assurance that he would not consider this, in any way, a speed trial, and that if occasion should arise, whereby people should be witnessing that spectacle under conditions of payment, they would not suffer from taxation in that direction. I think it would be possible for him to give that assurance, and I hope that he will.

7.0 p.m.

Mr. Peake: The Clause extends the benefit of the lower rate of Entertainments Duty to all games or sport, with certain exceptions, which are mentioned in the Clause. The exceptions are:
other than the racing or trial of speed of animals, vehicles, vessels or aircraft.
The right hon. Gentleman proposes to insert the word "motor" in front of the word "vessels", and that means that the racing or trial of speed of sailing vessels will only suffer the lower rate of Entertainments Duty. The point, therefore, to which, I think, we should have a clear reply, because the Clause as it now reads is not quite clear, is whether the

word "motor," which he intends to insert in the Clause, applies to the word "aircraft" as well as to the word "vessels". The Clause will now read:
Trial of speed of animals, vehicles, motor vessels or aircraft.
There are two kinds of aircraft, the aircraft propelled by a motor, and the glider not propelled by the motor. It is extremely likely that in future, when gliding becomes more popular—and it is already popular in this country—there will be trials of speed by aircraft not propelled by motors, and I hope that it will be made quite clear that the insertion of the word "motor" in the Clause applies to aircraft as well as to vessels I hope that the right hon. Gentleman will get that point cleared up, because, otherwise, I am quite sure there will be confusion.

Mr. Beechman: I would like to express my great appreciation of the interest taken by the Chancellor of the Exchequer in sailing. There is no doubt that it is in these vessels that seamanship is learned, and the interest which the Chancellor has shown will be a great source of encouragement to the Sea Scouts and Sea Cadets. These movements are beginning to flourish again in the parts of the country which I know well. I refer, particularly, to the Sea Scouts, because the Sea Cadets were, of course, at work during the war. We have, I think, four or five regattas, which will be taking place in the near future in Cornwall. I shall, in any case, watch them with joy, which will now be increased by the action which the Chancellor of the Exchequer has taken.

Mr. C. Williams: I do not wish to quarrel with the hon. Member for St. Ives (Mr. Beechman), but I think that I should point out to the Chancellor of the Exchequer that he did not take the initiative in this matter, which was left to members for South-East Cornwall and the Tory Party. Having spent some time during the proceedings on the Bill in being critical, I now congratulate the Chancellor of the Exchequer without any qualification whatever. I appreciate tremendously the fact that he has, in this Amendment, followed up our Amendment dealing with sailing vessels, because, after all, they provide one of the cleanest of all sports. I happen to represent in Torbay, Dartmouth and Brixham, places which have


the best sailing regattas in the whole world. They are, of course, acknowledged as far superior to the Isle of Wight and other minor yachting centres, such as the Clyde. I hope that when the Chancellor of the Exchequer, in a comparatively short time, gives up his office, as he certainly will, he will go to Torbay and enjoy himself there for the rest of a long life.

Mr. Dalton: I am sure that the matter of the launching of vessels, which was referred to by an hon. Member, would not be regarded as a speed trial. As regards gliders, that is frankly a point which had not occurred to me. We have not as yet done very much in the way of competitive sailing in the air by gliders, but I will look into the matter, although I think that a motor is required in the beginning. It seems to me that the glider is not quite on all fours with a sailing vessel in this respect. There are possibilities of lenient administration which might be called in, and if it should turn out that there was an inclination to treat gliding competitions more severely in terms of taxation than sailing boats, I would be prepared to take steps to correct it.

Mr. Marshall: May I thank the Chancellor of the Exchequer for that assurance, and take the opportunity, in view of the charming speech of the hon. Member for Torquay (Mr. C. Williams), of recommending the Chancellor to visit Fowey and Looe?

Amendment agreed to.

Mr. Dalton: I beg to move, in page 4, line 7, leave out from "themselves," to the end of the Subsection.

This is consequential.

Captain Crookshank: I understood that this had reference to boat races and more particularly such contests as university boat races. Is that correct?

Mr. Dalton: No, it is a different point.

Mr. I. J. Pitman: As a one-time member of the London Gliding Club, I should like to thank the Chancellor of the Exchequer for the hopes which he holds out in regard to gliding, and to assure him that competitive sport of that kind can take place without a motor. I have helped to launch gliders by elastic and other means and enjoyed a sailing meeting of that kind.

Amendment agreed to

CLAUSE 7.—(Entertainments duty on certain entertainments provided by bodies which are not profit making.)

Mr. Dalton: I beg to move, in page 4, line 44, at the end, to insert:
(3) In subsection (3) of section one of the Finance Act, 1935, after the words "a performance of music (whether vocal or instrumental)" there shall be inserted the words "an Eisteddfod.
This is designed to meet a very powerful plea, which was put up by the hon. Member for Westhoughton (Mr. Rhys Davies), far the inclusion, specifically and in terms, of "Eisteddfod." As I assured him when we were discussing this matter in Committtee, I am convinced that the insertion of these words is from the legal point of view unnecessary, but, nonetheless, particularly in view of the agreeable incident which came to me last weekend, it would be most inappropriate if I did not stretch a point in favour of the cultural glories of Wales. Therefore, I move this Amendment with great pleasure, and I am sure that it will place beyond the faintest flicker of 'doubt that an Eisteddfod is not to be treated as though it were same cruder form of entertainment, liable to tax at the very properly heavy rate. I was asked, on the last occasion, whether the "Mod" a Scottish ceremony, and the "Gorsedd," a Cornish ceremony—whether those two forms of musical festival are also safe. These are exempt from duty altogether. There is no question of the higher or the lower rate. The hon. Member for Torquay will hear me out when I say that there is no case in the past in which there has been an attempt to enforce Entertainment Duty on these cultural occasions. I think without putting any further words in the Clause, we can be assured that there will be no tax in the future.

Mr. McKie: I am grateful to the Chancellor for what he said about the Scottish musical festival. I feel sure that my hon. Friend the Member for Torquay (Mr. C. Williams)—although he no longer represents a Cornish constituency, he is none the less always anxious to safeguard Cornish interests—will be glad to hear the Chancellor say that it is unnecessary to use the name of the Scottish and Cornish festivals in this Clause, and to hear the assurance that no inconvenience or hardship will result. However, I should like to ask the right hon. Gentleman—and I


do not ask him in any spirit of being unfair to the Welsh festival—why he has singled out the Welsh festival for mention as distinct from the Scottish or Cornish festivals. I think both my hon. Friend who comes from Cornwall and I would like a little more assurance on this, because it is a point which may well rouse feelings of resentment both in Scotland and in Cornwall, unless the Chancellor gives a more lucid and thorough explanation. There is one other point to which I wish to refer. The Chancellor said he had been assured by the legal experts that the inclusion of this word "Eisteddfod" was unnecessary. Might I ask him whether it is strictly legal to use words of a foreign language, in a Statute of this House? I always thought if an hon. Member ventured to address you, Mr. Speaker, in either of the tongues which are used in common parlance in Scotland or Wales, you would immediately rule him out of Order. I, therefore, ask the Chancellor whether he has assured himself that, so far from safeguarding the Welsh national musical festival, he has not rather reached the point of being out of Order by introducing a foreign Word into this Measure.

Mr. Dalton: The reason for making provision for the Eisteddfod and not for the other two musical festivals was that initiative was shown in regard to the Eisteddfod and an Amendment was nut down by a Welshman. The Cornish and Scottish festivals were only brought in at a later stage in the course of oral exchanges during the Debate. I have satisfied myself that, as far as exemption is concerned, the three are all right. With regard to the use of foreign words, many words which originated in the Celtic fringe have passed into the common language of these islands. There are Scottish words, some of them very un-Parliamentary, which have passed into our common tongue, and in regard to singing there are after all such words as "psalms" and "canticles" which are not Norman-French, Anglo-Saxon or Welsh.

Mr. C. Williams: I was hoping that all I would have to do would be to say a few words of thanks to the Chancellor. But the right hon. Gentleman in what he said just now was inaccurate. He said that there was a lack of initiative in this matter in regard to the raising of the question of

the Cornish Gorsedd. It was nothing of the sort. The right hon. Gentleman should not contradict himself so often. When I saw the Amendment on this matter in the Committee stage I said to myself, "Perhaps I had better be certain of this; possibly the Chancellor knows something more about it than I do." I got an assurance from the Chancellor and I thought that was good enough. It seems to me yet to be quite good enough, and it was not until later that I noticed this Amendment down in the Chancellor's name. I tried to get an Amendment down, but I was too late. I always believed that the position operating hitherto was right, and the Chancellor said just now that we had been completely covered all the time and there had been no duty to pay on these festivals. In other words, it is almost useless to have this Amendment and I am not quite sure whether I ought not to speak and vote against it as a superfluity of little help to the Welsh people. However, instead I will pass to another argument, and that is that the Welsh Eisteddfod as compared with the Scottish Mod or the Cornish Gorsedd is neither as musical nor as educational nor as dramatic. For that reason it is unnecessary to define these two, because they come within the category of being artistic and musical. Unless the Welsh Eisteddfod was defined by an Act of Parliament, Heaven knows whether anyone would know whether it was artistic or anything else. I should of course realise its value but to the ordinary Saxon or Scotsman it would not appear to be either musical or artistic, and so this Amendment was necessary. I thank the Chancellor very much for enabling the House to know the real reason why he put down this Amendment.

Amendment agreed to.

CLAUSE 8.—(Passenger aircraft licences for sale of intoxicating liquor and tobacco.)

7.15 p.m.

The Financial Secretary to the Treasury (Mr. Glenvil Hall): I beg to move, in page 6, line 2, at the end, to insert:
(4) It is hereby declared that the Parliament of Northern Ireland has power to make laws for purposes similar to the purposes of this section.
This Clause deals with the granting of licenses to passenger aircraft, and the


Attorney-General of Northern Ireland, who looked at the Bill, has come to the conclusion that aerial navigation is reserved under the Government of Ireland Act. That being so, and since this Clause purports to grant licences in respect of aerial aircraft, he would not be prepared to certify a corresponding Clause unless supported by the appropriate enablement. This Amendment, together with one which the House will be asked to accept later on to Clause 62, will permit Northern Ireland to do that. It is felt by the Government, that this is really a domestic matter, and, although technically it comes within the terms of the Government of Ireland Act, it was not the sort of thing that the Government of the time did want to reserve.

Mr. Walker: I am very sorry to have to oppose my right hon. Friend the Chancellor in this matter, but I regard this Clause as being thoroughly bad, retrograde, and distinctly anti-social. The Amendment seeks to allow the Parliament of Northern Ireland to make laws for purposes similar to the purpose of this Clause, namely, to provide the means for drinking—

Mr. Speaker: We are discussing only whether Northern Ireland can apply. We cannot discuss the whole of the Clause.

Mr. Walker: We are asking Northern Ireland to do something which, in the opinion of many of us, is a very bad practice indeed. In my opinion we are not making ourselves an influential body of people in the eyes of the world in asking another Parliament, a member of the United Kingdom, to emulate our vices, rather than our virtues. The Clause allows drink to be sold to passengers on board an aircraft. I should imagine that a journey from one end of the United Kingdom to the other cannot possibly be more than two hours or so—

Mr. Speaker: The hon. Member is discussing the sale of drink. We have already passed the Clause, and we cannot discuss it any longer. We can merely discuss whether Northern Ireland has power to make laws under this Clause. It is a question of the powers of Northern Ireland, and nothing else.

Mr. Walker: I know that this is a topic on which a man like myself quickly

gets on to dangerous ground, Sir, so I will confine myself to saying that I am very sorry that a Labour Government, in which I am tremendously interested, should for one moment allow themselves to ask another Parliament to follow provisions such as are provided in this Clause. The Government are asking them to continue the vicious circle, instead of asking them to follow the great virtues for which we stand. I greatly deplore this Amendment.

Mr. J. Hudson: You have ruled very rightly on the matter before us, Mr. Speaker, so I must confine myself to a series of questions. Why should Northern Ireland have the right to send aeroplanes abroad with the assistance of "booze"? Why should there be the special advantage for Northern Ireland of allowing them to have liquor and tobacco licences for aeroplanes? I have just come back from a conducted tour of Austria, with other Members of Parliament. We were carefully informed before we went not to smoke. We have just published a very special warning about the dangers of drink in small quantities when driving motor vehicles. Why should we now ask Northern Ireland to go as wrong in this matter as we have gone wrong? We do foolish things in this House, but at least we can try to see that Northern Ireland does not do the same. I have great faith in Northern Ireland.
There is nobody from Northern Ireland here at the moment, but I would like to tell the House that Northern Ireland is exemplary in this matter of drink. [HON. MEMBERS: "Oh."] We must not blame every part of Ireland for the sins of the South, where, perhaps, drink has a special part to play. In Northern Ireland they drink, per head of the population, about three-fifths of what is drunk in this country. If I can safeguard Northern Ireland by any means, if I can protect them from the folly of the Chancellor, I will do so. I have had many good things to say about my right hon. Friend—he is a first-class man, he has done many excellent things, and I expect him to do many more—but in this matter, by granting facilities to Northern Ireland to send up aeroplanes on which there can be drinking, I think he is taking a retrograde step. I hope the public opinion in Northern Ireland will protect itself against the foolishness of the proposals in


this Amendment. I commend to the attention of my fellow citizens in Northern Ireland the necessity for keeping out of aeroplanes the drink which people have been warned not to take when driving motor vehicles, drink which may mean the difference between life and death. I wish this step had not been taken.

Lieut. -Commander Braithwaite: I am sure that if some of my hon. Friends representing Ulster constituencies had realised that we were to have two such interesting speeches as we have just had on this Amendment, they would have been here. In their absence, may I say how much I am indebted to the hon. Member for Rossendale (Mr. Walker) and to the hon. Member for West Ealing (Mr. J. Hudson) for demonstrating on the Floor of this House what many have known for so long —that teetotallers are notoriously "slower in the uptake" than any other section of the community? After all, what does the Chancellor's Amendment seek to do? To give power to the Government of Northern Ireland to refuse these licences if they think proper. The hon. Member for Rossendale said that the Government of Northern Ireland were being asked to provide liquor licences on board aircraft. All that is being done is to put the Government of Northern Ireland in precisely the same position as that of His Majesty's Government. This is really a drafting Amendment to make that possible, if the Government of Northern Ireland think it proper. So, let the two hon. Members opposite be comforted. The Government of Northern Ireland have power to refuse the licence. The hon. Member opposite rather suggested that we were asking Northern Ireland to grant licences. If he will read HANSARD tomorrow, he will find that that is what he said. I am rather surprised at him. The hon. Member for West Ealing took a rather more emphatic view. He is afraid of small quantities of alcohol being consumed. His speech reminded me of the story of two bluejackets walking past a Methodist chapel, outside of which was displayed the slogan:
There is more nutrition in one half-pint of milk than in 12 half-pints of beer.
One bluejacket said to his friend, "There is only one thing for it, we shall have to go and have 12 half-pints." I welcome this opportunity of defending the rights of the Parliament and Government of Northern Ireland to do as they think proper, either

to grant or to withhold the licences. It is an unusual experience for me to support the Chancellor. This is, however, merely a drafting Amendment. I think the discussion has been worth while if only because we have on record from two hon. Members opposite two particularly fatuous speeches such as we expect from temperance fanatics.

7.30 p.m

Mr. Norman Smith: I would not like the House to think that the attitude of my hon. Friend the Member for Rossendale (Mr. Walker) and my hon. Friend the Member for West Ealing (Mr. J. Hudson) is the attitude generally adopted by this party. I am entirely in favour of giving to Northern Ireland the same powers as we enjoy. I have no particular reason for being a political friend of Northern Ireland; I think their representation in the House leaves very much to be desired. But my hon. Friend the Member for West Ealing is entirely wrong on this matter. Nobody proposes that alcoholic or any other drinks should play a part in running air services anywhere, even to Northern Ireland. It is only suggested that the Northern Irish people, if they like, shall give aeroplane passengers an opportunity, if they want, to drink alcohol. Nobody proposes that the passengers shall have gin poured down their throats, and nobody would force gin down my throat, even if I were coming away from Belfast. I hope the House will support the Amendment. I am sorry the representatives of Northern Ireland are not here, I deplore their politics, but I am willing to be charitable and decent towards them, and I support the Amendment.

Amendment agreed to.

CLAUSE 10.—(Provisions for relief from duty on liquor licences, and suspension of justices' licences, where licensed premises compulsorily acquired.)

Mr. Sargood: I beg to move, in page 6, line 34, after "on," to insert:
including any temporary premises in which the business was carried on by virtue of a certificate given under Section nine of the Licensing Planning (Temporary Provisions) Act, 1945.''
I move this Amendment merely for the purpose of clarifying the position. I want to be sure that the Clause is intended to


include temporary premises to which the licence has been transferred. If the Chancellor will give me that assurance, I shall be willing to ask leave to withdraw the Amendment.

Mr. Harrison: I beg to second the Amendment.

Mr. Dalton: I am very glad to give my hon. Friend the Member for West Bermondsey (Mr. Sargood) the assurance for which he has asked. I am advised that it is quite unnecessary to insert the words of the Amendment. Subsection (2, a) applies equally to temporary and to permanent premises, the words of the Amendment would add nothing, and therefore, are not desirable.

Mr. Sargood: I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

CLAUSE 13.—(Cesser of charge and reduction of rates of purchase tax in respect of certain goods.)

Mr. Glenvil Hall: I beg to move, in page 9, line 15, after "Subsection," to insert "at the basic rate."
I think it would be convenient, Mr. Speaker, if I dealt with this Amendment and the next two Amendments together. The first two are drafting Amendments, and the third one is necessary to provide that the alterations in tax made by the Amendments to the Third Schedule, which are to be moved later on, shall operate as from 22nd July next. The reason for choosing 22nd July as the operative date is that it is the first convenient date after the House has given some sort of approval to the changes which my right hon. Friend has agreed to in the various items coming under the Purchase Tax Schedule. Clearly, it would have been undesirable to have fixed a date before there was any Parliamentary sanction for the changes that are to be made, and if the date were made retrospective it would have led to difficulties, and there would have been claims for repayment. We hope the House will accept this compromise date, which is, on the whole, the best in the circumstances.

Amendment agreed to.

Further Amendments made:

In page 9, line 15, at the end, insert "second or."

In line 29, at the end, insert:
Provided that to the extent that the provisions of Subsection (1) and the proviso to Subsection (2) of this Section relate to the classes of goods shown in Part I of the Third Schedule to this Act as becoming exempt on the twenty-second day of July, nineteen hundred and forty-six, and to the extent that the provisions of the said Subsection (2) relate to the classes of goods shown respectively in Parts II and III of the said Third Schedule as becoming on the said date chargeable at the reduced rate and the basic rate, those provisions shall be deemed to have come into operation on the said date, and references in this Subsection to the said tenth day of April shall in relation to those provisions and to that extent be construed as references to the said twenty-second day of July."—[Mr. Hall.]

CLAUSE 21.—(Amendments of Finance (No. 2) Act, 1940, S. 28.)

The following Amendment stood upon the Order Paper in the name of Sir A. GRIDLEY:

In page 15, line 7, at the end, to insert:
(4) Where by any provision of this or any subsequent Act any change is made in the classes of goods which are chargeable goods or in the rate at which tax is chargeable in respect of goods of any class,

(a) any person is the owner of goods coming within that class for the purpose of resale and the purchase price paid by him for those goods includes tax or includes tax at the rate chargeable prior to the date of such change, he shall be entitled to declare to the seller to him of those goods the quantity of them belonging to him at that date and the amount of the tax included in such purchase which would not have been included if he had purchased them after the date of such change;
(b) if the seller is a registered wholesaler or manufacturer he shall give a rebate to the claimant equal to such amount of tax on proof to his satisfaction of the amount of the purchase and of the tax included in the purchase, and he shall be entitled to claim from the Commissioners an amount equal to such rebate given to the claimant and the claim shall be satisfied by the Commissioners either by repayment or by deduction from tax otherwise due but not yet paid over to the Commissioners by such registered person;
(c) if the seller who received a claim from the owner of the goods under paragraph (a) of this Subsection is not a registered person he may, on proof of the amount of the purchase and of the tax, claim from the seller to him of the goods an equal amount of tax and so on for each successive sale up to the first registered person in a series of sales of those goods;
(d) the first registered person shall have the duties and rights mentioned in paragraph (b) of this Subsection and the claimant from him shall be obliged out of the moneys received by him to satisfy claims made upon


him and so on for each successive sale of those goods down to the owner of the goods on the date when the change mentioned in paragraph (a) is effective."

Mr. Speaker: This Amendment is not selected.

Captain Crookshank: On a point of Order, Mr. Speaker. May I submit to you, with all humility, that the purpose of this Amendment was to deal with what the Chancellor said in Committee, when we discussed some proposals which we put forward to deal with what was to happen when the Purchase Tax was reduced and goods were still left in the hands of the retailers? Perhaps I may quote what the Chancellor said:
As the hon. Gentleman the Member for St. Marylebone (Sir W. Wakefield) has reminded me, I did say that we would see whether the position could be improved. We have gone into it with great care, and we have not been able to find any practical way in which this particular grievance can be removed. Certainly, the pursuit of this rather elusive goal can be continued. At present we have not found the answer nor has the hon. Gentleman who moved the Amendment"— [OFFICIAL REPORT, 20th June, 1946; Vol. 424, C. 424–5.]
That was the position with regard to this proposal, and as a result, the Committee took a decision. This Amendment is now brought forward with an entirely new way, in the view of my hon. Friend the Member for Stockport (Sir A. Gridley), of getting over the difficulty. For that reason, I respectfully ask whether you would reconsider your decision and allow us to discuss the plan.

Mr. Dalton: Further to that point of Order, Mr. Speaker, without wishing either to challenge or to seek to lend support to any decision you may make, I would point out that, although the right hon. and gallant Member for Gains-borough (Captain Crookshank) accurately quoted what I said, I did indicate that I was anxious to be conciliatory in order to ascertain the position, but I did not hold out a hope that we could in the near future find a solution for this, and in fact, we have not found it. It is one of those things which have to be pursued over a length of time, but we are no further now than we were in Committee towards finding any point of agreement between those who moved the Amendment and the Government.

Mr. Speaker: I am afraid that this Amendment, or a similar Amendment,

was discussed for some time in Committee, and negatived. I took advice from the draftsmen and others, and I came to the conclusion that the proposal in this Amendment was not an alternative method, and therefore, I could not select it. I have not selected the next three Amendments. The next four Amendments are out of Order. The next Amendment was negatived in a Division—

Captain Crookshank: On a point of Order, Mr. Speaker. With regard to that Amendment to Clause 26—in page 19, line 23, at the end, insert "or (f) is payable to a charity"—may I respectfully submit that the Chancellor indicated that he would think about it again? We put this Amendment on the Order Paper in the hope that we would have the benefit of the Chancellor's reflection.

Mr. Dalton: I shall have to be very careful about saying that I will think again if this is what happens.

Mr. Speaker: The Chancellor of the Exchequer has not put down any Amendment on this point.

Captain Crookshank: It is within my recollection that the Chancellor has sometimes accepted Amendments which have been brought forward, without necessarily putting his name to them. We had hoped that this was one of those occasions.

CLAUSE 28.—(Armed forces, etc.)

Mr. Glenvil Hall: I beg to move, in page 21, line 7, to leave out from the first "the," to "as," in line 8, and to insert:
Schedule (Women's Services) to this Act.
With your permission, Mr. Speaker, I will discuss this and the following Amendment together. These changes implement a promise I gave during the Committee stage to the right hon. and gallant Gentleman the Member for Gains-borough (Captain Crookshank), who took exception, in my view quite properly, to the reference in the First Schedule to the Disabled Persons Employment Act, 1944, and suggested that we should do what we had done in the Superannuation Bill and actually list the Women's Services in a Schedule. We have now done this and when we reach the


Schedules we shall ask the House to insert the List.

Amendment agreed to.

Consequential Amendment made.

CLAUSE 33.—(Relief from excess profits tax for terminal expenses.)

The Solicitor-General: I beg to move, in page 26, line 43, at the end, to insert:
or, if the circumstances so require, until such later date as the Commissioners may allow, being a date not later than the end of the year nineteen hundred and forty-nine.
This is an Amendment which is designed to meet the argument advanced, in particular, by the right hon. Gentleman the Member for the Scottish Universities (Sir J. Anderson). As the House will recollect, terminal expenses qualify under Clause 33 of the Bill if they are incurred in 1947 and subject to notice being given in 1948. It was strongly represented during the discussion on the Committee stage that that was too short a period to enable terminal expenses to be met. My right hon. Friend the Chancellor of the Exchequer undertook to reconsider the period and as the result of that reconsideration this Amendment appears on the Order Paper. It is designed, in effect, to extend the period to such later date as the Commissioners think appropriate in a particular case to allow, such later date, however, not to be later than the end of 1949. That gives the Commissioners a discretion in respect of one additional year, and I hope that the House will think that a reasonable way of meeting the argument and one which represents a fair concession to the point of view which was advanced, particularly by the right hon. Gentleman and also by other hon. Members on the other side of the House.

7.45 P.m.

Sir J. Anderson: As the hon. and learned Gentleman has said, this Clause deals with a matter on which I addressed the Committee during the Committee stage. I am bound to say that the Amendment on the Order Paper does not go quite so far as I had hoped. I made it clear in the arguments that I advanced that I fully sympathised with the desire of the Chancellor and the Revenue authorities to wind up these matters at the earliest convenient date. I should like the Financial Secretary to the Treasury to take note that I still do not feel that one

can be confident that all the work which has to be done will, in tact, be completed even by the extended date now specified in this Amendment. There are difficult questions involved; the effect of the previous proposal, as explained by the Chancellor, of encouraging the speediest possible completion of the deferred maintenance was, as I pointed out, one which, in my view, certainly ought to be avoided rather than encouraged, because there is little doubt that in many cases the repair of war damage should come ahead of deferred maintenance.
I take it that the Chancellor, in putting this Amendment on the Order Paper, has recognised the force of the argument I put forward. On that assumption I would certainly advise my hon. Friends to accept the Amendment on the understanding, of course, that if experience over the next 18 months or so should prove that, unfortunately, it is not going to be possible to dispose of this matter altogether within the extended time now allowed, proper and sympathetic consideration will be given on a later occasion to the question of a further extension. For the present, holding, as I do, that it is important that these matters should be wound up as soon as is reasonably practicable, I would, for my own part accept this Amendment, thank the Chancellor of the Exchequer for the concession he has made, and trust that the House will agree with me generally in that view.

Amendment agreed to.

Sir A. Gridley: I beg to move, in page 29, line 6, at the end, to insert:
(d) The terminal expenses which are to be left out of account under paragraph (b) and paragraph (c) of this Subsection shall be attributed to the body corporate which incurred the terminal expenses.

Mr. Deputy-Speaker (Mr. Hubert Beaumont): I think it would be for the convenience of the House if we discussed, at the same time, the two following Amendments standing in the name of the hon. Gentleman—in page 29, line 13. at the end, to insert:
in any claim by the body corporate and shall be attributed to the principal company of the group.
and in page 29, line 22, at the end, to insert:
in any claim by the body corporate and shall be attributed to the principal company of the group.

Sir A. Gridley: These Amendments were put down on the Committee stage but I thought it proper to put them down again, because they are directed to a common purpose to which I attach considerable importance as, I think, the House should also. It is that an assurance given by a former Chancellor of the Exchequer, the late Sir Kingsley Wood, in 1943, should be fulfilled. The assurance was that all the expenses of a revenue nature which were incurred in earning one's excess profits would be allowed as a deduction when the time came for clearing up the outstanding questions.
The Bill makes arrangements in respect of terminal losses, in order to fulfil the promise made by the Chancellor. If a company joins a group of companies, neither the group nor any of the companies will get an allowance for expenses. I do not think the fact can be disputed that E.P.T. charged on businesses has been increased because of war circumstances and of expenditure incurred on deferred repairs and rehabilitation. It therefore is no kind of excuse to refuse to refund the overcharged expense merely because the shareholders of a company changed, when it joined or left a group of companies. If the company is not at any time a member of the group, its shares can go on changing hands indefinitely without affecting its right to claim allowances. Why should there be discrimination against groups of companies? Allowances for terminal expenses in all other cases have remained dependent upon expenditure being incurred. The Amendment which was moved during the Committee stage was criticised on the ground of its vagueness. Other Amendments, not selected, sought to give the E.P.T. allowance to the persons who paid the extra tax. The Amendment I now move differs slightly from the earlier Amendment. The main purpose is to see that one or other of the persons concerned receives the allowance. I emphasise that it is an important principle that technicalities should not be allowed to stand in the way of the fulfilment of assurances given in Parliament.
The Amendment avoids the technical objection which was raised in Committee, by giving the allowance to the person Who actually laid out the money, except in the case of deferred repairs, in which case another Clause says that the cost of the repairs can be related to any

period. I have given this explanation in justification for the Amendment and the other two Amendments in my name which are being discussed at the same time. I hope that I have given the Solicitor-General an argument for reconsideration of the views which he expressed when dealing with this matter on the previous occasion.

Sir P. Bennett: I beg to second the Amendment.
My hon. Friend the Member for Stockport (Sir A. Gridley) has explained how it has been possible to clarify the position and to make plain exactly what we claim. The only point I wish to emphasise is that if a company is not in a group of companies, its shares can change hands on the open market and no one takes any notice. Because it is in a group, there seems to be suspicion that something is going on that ought not to go on, and that therefore the companies have to be specially controlled. I can never understand why there should be any attempt to penalise groups. Groups arise because of necessity. Many of us have an objection to attempts being made to freeze industry into its present mould and to say, "That is how you shall go on. You shall not change." Changes are made because of necessity. People do not form groups of companies for amusement or to provide lawyers with fees. There is usually some change in circumstances, necessitating a change from one group to another. I support my hon. Friend in urging that nothing should be done to prevent the normal development of business along lines which are most helpful. We shall be fighting for our lives in the commercial world against other countries in the days to come, and we want nothing to be done to prevent our taking advantage of every opportunity. Here is a case, in which we feel that an unnecessary curb is being placed upon industry.

The Solicitor-General: This topic was canvassed very fully when the Finance Bill was in Committee, and both hon. Gentlemen who have put their names to the Amendment then put their names to an Amendment which purported to deal with the problem on rather different lines. We feel that the Amendment now put down in no sense solves the problem better than the previous Amendment, and that neither of them can be accepted
In answering the case that was made in support of the previous Amendment I said that Excess Profits Tax legislation treated groups of companies as units and that it was highly undesirable that, if a company ceased to be a member of a unit, the right to deferred repair allowance in respect of that company should depend upon whether the future owner carried them out or not. Exactly the same objection exists in regard to this Amendment. I want to examine this matter in a little more detail, but before I do so I would remind the House, as I did the Committee, that Clause 35 (4) lays down that where there is real injustice, in the sense that the change of ownership is only a partial change and there is some community between the old and the new owner, discretion is vested in the Commissioners to do what is right, so as not to prejudice that common ownership. There is, therefore, as it were, a safety valve and a buffer. I called the attention of Members to that before, and I do so again. There is no reason why, where there is only a partial change of ownership, a perfectly fair order should not be made which would preserve to the continuing owner such right as he had in the company before it ceased to be a member of the group which it has left. There will be no injustice at all where there is anything that can be said to be a semblance of common ownership. Where there is no continuity, and the company has come completely under new ownership, it is entirely wrong that there should be any right to deferred repairs allowance which should depend upon the action of somebody who is no longer the owner of the company and no longer the person entitled to those deferred repairs. It is only necessary to state that, to indicate its undesirability.
8.0 p.m.
Supposing I am the owner of a company and I sell it to somebody else, it is entirely improper and undesirable from a commercial point of view that my right to a deferred repairs allowance should depend on the action of the new owner which I cannot influence one way or the other, and who has his own perfectly good reasons for deciding whether or not he will carry out these repairs. That is one reason why the Excess Profits Tax legislation regards these groups of companies as units. That objection has not

been met by the Amendment, and I will tell the House why. I will analyse what would happen in the case of each of the Amendments in the name of the hon. Member for Stockport (Sir A. Gridley). I will use letters as symbols and I hope it will be clear. "A" is a member of group "X." In the final Excess Profits Tax chargeable accounting period for 1946, for example, we have company "A and group" In 1947 the whole of the shares of "A" are bought by another group, "Y." If the first of the proposed Amendments was accepted, the result would be that while "A" was a member of group "Y," "X" would or would not get the deferred repairs allowance according to whether "Y" decided to carry out the repairs or not. In other words, company "A" passes from "X" to
"Y." "X" is the group which it is suggested should retain and enjoy the deferred repairs allowance. "Y," the present owner of the company, may or may not decide to carry out those repairs, and according to whether it does decide to carry them out or not, "X" will enjoy the deferred repairs allowance. That cannot be right. It is not commercial commonsense. It would lead to various abuses, and there is no logic or sense about it. That is why the Clause is drawn as it is, so as to exclude "X" having the right to a deferred repairs allowance in that set of circumstances.
The second and third Amendments do exactly the same thing. They provide again that one group shall benefit or shall not benefit in respect of a deferred repairs allowance dependent upon whether the subsequent group which acquires the company does the repairs or not. That cannot be right. If the House will analyse the effect of the Amendments, they will find they bring about a position similar to that I have described in respect of the first one. I ask the House to say that these are adequate reasons why this particular set of Amendments should not be adopted. The Excess Profits Tax legislation treats these groups of companies as one unit, and that is fundamental and basic to it. Deficiencies are not carried on from one group to another, as I am sure the hon. Members who moved and seconded the Amendment know only too well. The reason is exactly the same. The Excess Profits Tax code regards these groups of com-


panies as a single unit in the same way as a partnership—

Sir A. Gridley: So long as they remain together?

The Solicitor-General: So long as the partnership remains a partnership. There is a buffer Clause in respect of a partnership. The net result is that each of these Amendments would lead to most undesirable results on the lines I have indicated. Where, however, there is not a complete change of ownership, so that the same person or group of persons are the continuing owners to a greater or lesser extent, the Commissioners are given discretion to make such orders they think proper in the circumstances to prevent any injustice, but when one seeks to go beyond that and to transfer the right to an allowance from a former to a later owner, entirely different in identity, one is going beyond the principles upon which the Excess Profits Tax legislation is based.
I ask the House to say that, for these reasons, these Amendments ought not to be accepted. I quite see the point behind them, but the hon. Member for Stockport cannot have considered exactly what they would lead to. I hope that hon. Gentlemen opposite will see their way to withdraw the proposal on the ground that it is objectionable in exactly the same way that the previous proposal which they moved was objectionable. It is fundamental in this case that the right to deferred repairs allowance must depend on their being carried out by the owner for the time being who is entitled to enjoy the allowance which is given in respect of deferred repairs actually carried out. I ask the House to reject these Amendments.

Captain Crookshank: This is frightfully technical, and I cannot persuade myself that I have understood the whole of it. I take it that what the Solicitor-General is relying on is not in this Clause but is in Clause 35 (4)

The Solicitor-General: I am sorry if I have not made it clear. What I said is that when one has a complete change of ownership, these particular Amendments would lead to undesirable results if they were accepted. Where one has a partial change of ownership, Clause 35 (4) prevents any injustice being done

Captain Crookshank: That crystallises the point. The Solicitor-General was referring to what the Commissioners might do if they thought fit, but that is not in the Clause. In the case of a partial change, the Solicitor-General relies on Clause 35 (4) which says:
…the Commissioners may, if they think lit, allow the relief or additional relief or such part thereof as they think just, having regard to the extent to which the persons directly or Indirectly interested in the trade or business…
and so on. The Solicitor-General relies on that. It was put in later in the Committee stage.

The Solicitor-General: No.

Captain Crookshank: Was that not the case? In any case, where there is a partial change, the Solicitor-General relies on the discretion of the Commissioners. The case of my hon. Friends is that it should be made quite clear that the expenses should be allowed to the person who actually incurs the expense. There is some doubt whether there is a break up in a group. I am not yet quite clear whether that principle is adopted throughout—that if expenses are incurred, it is the people who incur the expenses to whom the allowances eventually go.

The Solicitor-General: Not necessarily.

Captain Crookshank: It is not necessarily so? Then I must leave my hon. Friends to think out the consequences of that from the point of view of their own Amendment.

Sir A. Gridley: May I ask a question—

Mr. Deputy-Speaker: The hon. Member can speak a second time only by leave of the House.

Sir A. Gridley: I am putting my point in the form of a question, Mr. Deputy-Speaker, and of course I understand that I can only speak a second time with the leave of the House. The question is this: Suppose I represent a company in a group of five or six companies all hitherto welded together. My undertaking is sold to another body altogether and I have a claim for compensation for deferred repairs which I have not been able to carry out. Is it the view of the Government that because I am sold from the body with which I have been connected to another, I must give up my claim to this compensation allowance for deferred repairs merely-because I have broken away from the


body with which I have been associated so long and have attached myself to another?

The Solicitor-General: Unless it is only a partial change of ownership.

Sir A. Gridley: I am assuming a complete change of ownership. In that case it is the State that benefits, and there is no encouragement to the undertaking to carry out its deferred repairs. If it does not carry them out, presumably the price paid to the seller will be so much less and no sum will be provided to enable the repairs to be carried out. In that case the State benefits merely because an undertaking is sold from one group to another.

Mr. I. J. Pitman: In this particular case it seems to me that the hon. and learned Solicitor-General is making a change from the accepted and universal practice of regarding as a legal entity any body which is incorporated. It seems to me that it is the incorporated body, rather than the ultimate owners of the undertaking, who hold the shares in their corporate entity; it is the corporate entity which has paid the outgoings in Excess Profits Tax, which is the one entitled to receive the benefit in due time. Is the Solicitor-General not making a fundamental change in the legal conception in this respect? Is not this in some sense a pure debt? Take Company A which is owed £100,000 by somebody who might pay it. The shareholders of Company A in the course of time between the contracting of that debt and the liquidating of it are changed on the nominal register of shareholders, but it does not seem to me that that is any reason for saying, "That debt just does not count; the company will not get it, and the debtor will be let off." That seems to me to be largely the point being put by my hon. Friend who moved the Amendment. I would like to know where I have gone wrong, if, indeed, I am wrong.

8.15 p.m.

Lieut.-Commander Braithwaite: No doubt the hon. and learned Solicitor-General would like to reply to these points together. I followed him with great attention and, as my right hon. and gallant Friend said, we are in very deep legal and technical waters. The only thing which was really clear was that the absence of the Chancellor means that we are to get no concession. The hon. and learned Gentleman is always left to hand

out rebuffs whereas the Chancellor of the Exchequer hands out benefits. The hon. and learned Gentleman always deals with these difficult matters most agreeably. However, I would put this to him: that the present industrial phase through which we are passing is unique in one sense. The hon. and learned Gentleman may recall that during the Committee stage an Amendment was moved, which 1 supported, dealing with concentrated industries in another connection. During the war it was necessary to carry out over a very wide field the concentration of industries inaugurated by the present Chancellor at the Board of Trade. At the time everybody realised it was necessary for war production. Some of those industries have found concentration beneficial and are now seeking to amalgamate. Others, on the other hand, are seeking to return to their former status. I am not clear from the speech of the hon. and learned Gentleman whether industries thus concentrated during the war by the Government of the day thereby become members of groups. Certainly they have had to operate as such. The whole of the machinery of administration and organisation has had to be so operated. The hon. and learned Gentleman may tell us that the financial arrangements were never so concentrated. Of course the financial arrangements were very considerably affected.
With regard to his illustration of Company A in Group X, Company A might have been concentrated within the ambit of Group X during the war, making, let us say, radar equipment. Well the war is now over and Company A wishes to return to the form of manufacture in which it was engaged in 1937 or 1938, and for that reason its continued existence within Group X is no longer desirable. It is therefore the desire of the directors of Company A now to detach themselves from Group X, and Group Y may be a convenient organisation for them. That cannot be an exceptional instance; there must be many others all over the country in similar industries. I was not clear from the speech of the hon. and learned Gentleman whether this payment, which will disappear if this Amendment is rejected, covers the case of the industry which has been forced to concentrate. If it does, I think a hardship is being created. If it does not, the hon. and learned Gentleman will perhaps


get up and say so, and by doing so will place on our records words of great importance to a number of people who must be wondering what will be the outcome of this discussion.

The Solicitor-General: If I may have the permission of the House to speak again, I would like to deal with the points made. With regard to the questions asked by the hon. and gallant Gentleman the Member for Holderness (Lieut.-Commander Braithwaite), the answer to the question depends whether within the definitions in the Acts there is a group. A group consists, in terms of the Acts, of a principal and subsidiaries, and a subsidiary company is one which is owned as to more than nine-tenths of its shares by a principal company. It depends upon what form the concentration has taken. I should think that normally et would not take that form of concentration, but it is, of course, a question of the facts in every particular case.
In answer to the hon. Gentleman the Member for Bath (Mr. Pitman), with great respect to him and to the House, I feel that he is under a misconception as to the nature of these deferred repairs allowances. They are not debt dues from anybody to anybody; they are debts conditional upon certain repairs being carried out. If repairs are actually carried out and expenditure is incurred, an allowance is due. But there is no debt which subsists apart from the actual carrying out of the repairs. It is true that in one of the concessions the Government have made, in respect of buildings acquired before 1937, in one of the new Clauses I moved today, there is some-

thing which goes a little nearer to creating something which might be called a debt. But there is expense incurred in the erecting of a new building in place of the pre-1937 building. It is a wholly misconceived view to think that there is any debt in the case of the body corporate which is cancelled as a result of this cancellation of the right to deferred purchase allowance. There is nothing of the sort. It is a right to an allowance conditional upon certain repairs being carried out.

The Excess Profits Tax code regards these groups as a single entity. That is made clear by the fact that the Excess Profits Tax is collected from the principal of the group. The group is to all intents and purposes treated as one and when a company leaves a group all that happens is that the right to earn that allowance by the carrying out of those repairs, ceases, because that group has not carried out the repairs. It is all conditional on the repairs being carried out. That leads to the proposition I advanced earlier, that it would be entirely undesirable if one group could have the right to enjoy the allowance or not have the right according to whether or not a subsequent owner of the company which was a member of that group decided on his own volition, and for reasons which he thought good, to carry out repairs or not. For these reasons, in addition to those which I gave earlier, I ask the House to reject the Amendment.

Question put, "That those words he there inserted in the Bill."

The House divided: Ayes, 116; Noes, 265.

Division No. 251.]
AYES.
[18.25 p.m.


Allen, Lt.-Col. Sir W. (Armagh)
Darling, Sir W. Y.
Hope, Lord J.


Amory, D. Heathcoat
Digby, Maj. S. W.
Howard, Hon. A.


Assheton, Rr. Hon. R.
Dodds-Parker, A. D.
Hurd, A.


Aster, Hon. M.
Donner, Sqn.-Ldr. P. W.
Hutchison, Lt.-Cm. Clark (E'b'rgh W.)


Baldwin, A. E.
Drayson, Capl. G. B.
Jeffreys, General Sir G.


Beamish, Maj. T. V. H.
Drewe, C.
Joynson-Hicks, Lt.-Cdr. Hon. L W


Beechman, N. A.
Eccles, D. M.
Kingsmill, Lt.-Col. W. H.


Bennett, Sir P.
Eden, Rt. Hon. A.
Lambert, Hon. G.


Birch, Nigel
Fleming, Sqn.-Ldr. E. L
Lancaster, Col. C. G.


Bower, N.
Fletcher, W. (Bury)
Legge-Bourke, Maj. E. A. H.


Boyd-Carpenter, J. A.
Foster, J. G. (Northwich)
Linstead, H. N.


Braithwaite, Lt.-Comdr. J. G.
Gage, Lt.-Col. C.
Lipson. D. L.


Bromley-Davenport, Lt.-Col. W
Galbraith, Cmdr. T. D.
Low, Brig. A. R. W.


Buchan-Hepburn, P. G. T,
Glossop, C. W. H.
Lucas, Major Sir J.


Butcher, H. W.
Gridley, Sir A.
Lucas-Tooth, Sir H.


Carson, E.
Grimston, R. V.
MacAndrew, Col. Sir C.


Challen, C.
Hannon, Sir P. (Moseley)
Mackeson Lt.-Col. H. R.


Clarke, Col. R. S.
Hare, Lieut.-Col. Hon. J. H. (W'db'ge)
Macpherson, Maj. N. (Dumfries)


Clifton-Brown, Lt.-Col. G.
Harvey, Air-Comdre. A. V.
Maitland, Comdr. J. W.


Conant, Maj. R. J. E.
Headlam, Lieut.-Col. Rt. Hon. Sir C
Mannmgham-Buller, R. E.


Crookshank, Capt. Rt. Hon. H. F. C.
Hogs, Hon. Q.
Marlowe, A. A. H.


Crosthwaite-Eyre, Col. O. E.
Holmes, Sir J. Stanley (Harwich)
Marples, A. E.




Marshall, D. (Bodmin)
Raikes, H. V.
Thorp, Lt.-Col. R. A. F.


Marshall, S. H. (Sutton)
Rayner, Brig. R
Touche, G. C.


Maude, J. C.
Renton, D.
Turton, R. H.


Medlicott, F.
Robinson, Wing-Comdr. Roland
Vane, W. M T.


Mellor, Sir J.
Ross, Sir R.
Wakefield, Sir W. W.


Molson, A. H. E.
Sanderson, Sir F.
Walker-Smith, D.


Morris-Jonas, Sir H.
Shephard, S. (Newark)
Ward, Hon. G. R.


Morrison, Maj. J. G. (Salisbury)
Shepherd, W. S. (Bucklow)
Watt, Sir G. S. Harvie


Neven-Spence, Sir B.
Smiles, Lt.-Col. Sir W.
Wheatley, Colonel M. J.


Orr-Ewing, I. L.
Smith, E. P. (Ashford)
White, J. B. (Canterbury)


Osborne, C.
Spearman, A. C. M.
Williams, C. (Torquay)


Peake, Rt. Hon. O.
Stanley, Rt. Hon. O.
Williams, Gerald (Tonbridge)


Peto, Brig. C. H. M.
Stewart, J. Henderson (Fife, E.)
Willoughby de Eresby, Lord


Pickthorn, K.
Stoddart-Scott, Col. M.
York, C


Pitman, I. J.
Stuart, Rt. Hon. J. (Moray)



Ponsonby, Col. C. E.
Teeling, William
TELLERS FOR THE AYES


Poole, O. B. S. (Oswestry)
Thorneycroft, G. E. P. (Monmouth)
Sir Arthur Young and


Prescott, Stanley
Thornton-Kemsley, C. N.
Mr. Studholme




NOES.


Adams, Richard (Balham)
Deer, G.
Levy, B. W.


Adams, W. T. (Hammersmith, South)
Diamond, J.
Lewis, A. W. J. (Upton)


Alexander, Rt. Hon. A. V.
Debbie, W.
Lindgren, G. S.


Allen, A. C. (Bosworth)
Dodds, N. N
Lyne, A. W.


Allen, Scholefield (Crewe)
Donovan, T.
McAdam, W.


Alpass, J. H.
Dugdale, J (W. Bromwich)
McEntee, V. La T


Anderson, A. (Motherwell)
Dumpleton, C. W.
McGhee, H. G.


Attewell, H. C.
Durbin, E. F. M.
Mack, J. D.


Austin, H. L.
Dye, S.
McKay, J. (Wallsend)


Awbery, S. S.
Ede, Rt. Hon. J C.
McLeavy, F.


Ayles, W. H
Edwards, Rt. Hon. Sir C. (Bedwellty)
Macpherson, T. (Romford)


Ayrton Gould, Mrs. B
Edwards, John (Blackburn)
Mainwaring, W. H.


Bacon, Miss A.
Fletcher, E. G. M. (Islington, E.)
Mallalieu, J. P. W.


Balfour, A.
Follick, M.
Manning, Mrs. L. (Epping)


Barstow, P. G
Foot, M. M.
Marquand, H. A.


Barton, C.
Forman, J. C.
Marshall, F. (Brightside)


Battley, J. R
Freeman, Maj. J. (Watford)
Mathers, G.


Bechervaise, A. E.
Gaitskell, H. T. N.
Medland, H. M.


Bellenger, F J.
Ganley, Mrs. C. S.
Messer, F.


Benson, G.
George, Lady M. Lloyd (Anglesey)
Middleton, Mrs. L


Bing, G. H. C
Gibbins, J.
Mikardo, Ian


Binns, J.
Gibson, C. W
Millington, Wing-Comdr. E. R


Blenkinsop, Capt. A
Gilzean, A.
Mitchison, Maj. G. R.


Boardman, H.
Glanville, J. E. (Consett)
Monslow, W.


Bowen, R.
Goodrich, H. E.
Moody, A. S.


Bowles, F. G (Nunsaton)
Gordon-Walker, P. C.
Morgan, Dr. H. B.


Braddock, Mrs. E. M. (L'pl, Exch'ge)
Greenwood, Rt. Hon. A. (Wakefield)
Morris, Lt.-Col. H. (Sheffield, C.)


Braddock, T. (Mitcham)
Greenwood, A. W. J. (Heywood)
Morris, P. (Swansea, W.)


Brook, D. (Halifax)
Grenfell, D. R.
Morrison, Rt. Hon. H. (Lewisham, E.)


Brooks, T. J. (Rothwell)
Griffiths, D. (Rother Valley)
Mort, D. L.


Brown, George (Belper)
Gunter, Capt. R. J
Moyle, A.


Brown, T. J. (Ince)
Guy, W. H.
Murray, J D.


Buchanan, G.
Hale, Leslie
Nally, W.


Burden T. W.
Hall, W. G. (Colne Valley)
Neal, H. (Claycross)


Burke, W. A.
Hamilton, Lieut.-Col. R.
Nichol, Mrs. M. E. (Bradford, N.)


Callaghan, James
Hannan, W. (Maryhill)
Nicholls, H. R. (Stratford)


Castle, Mrs. B. A.
Hardy, E. A.
Noel-Buxton, Lady


Chamberlain, R. A
Harrison, J.
O'Brien, T.


Champion, A. J.
Hastings, Dr. Somerville
Oldfield, W. H


Chater, D.
Haworth, J.
Oliver, G. H,


Chetwynd, Capt. G. R
Henderson, A. (Kingswinford)
Paget, R. T.


Clitherow, Dr. R.
Henderson, Joseph (Ardwick)
Paling, Rt. Hon. Wilfred (Wentworth)


Cluse, W. S.
Hicks, G.
Palmer, A M. F.


Cobb, F. A.
Hobson, C. R.
Pargiter, G. A.


Cocks, F. S.
Holman, P.
Parkin, Flt.-Lieut. B. T.


Collick, P.
Holmes, H. E. (Hemsworth)
Paton, Mrs. F. (Rushcliffe)


Collindridge, F
House, G.
Paton, J. (Norwich)


Collins, V. J.
Hoy, J.
Peart, Capt. T. F.


Colman, Miss G. M.
Hudson, J. H. (Ealing, W.)
Perrins, W.


Comyns, Dr. L.
Hughes, Hector (Aberdeen, N.)
Platts-Mills, J. F. F


Cooper, Wing Comdr. G.
Irving, W. J.
Porter, G. (Leeds)


Corbet, Mrs. F. K. (Camb'well, N.W.)
Isaacs, Rt. Hon. G. A.
Pritt, D. N.


Corlett, Dr. J.
Jegar, G. (Winchester)
Proctor, W. T.


Cove, W. G.
Jones, D. T. (Hartlepools)
Pursey, Cmdr. H.


Crawley, Fll.-Lieut. A.
Jones, J. H (Bolton)
Randall, H. E.


Crossman, R. H. S.
Jones, P. Asterley (Hitchin)
Ranger, J.


Daggar, G.
Keenan, W.
Rees-Williams, D. R.


Daines, P.
Kenyon, C.
Reeves, J.


Dalton, Rt. Hon. H.
Key, C. W.
Reid, T. (Swindon)


Davies, Edward (Burslem)
Kinley, J.
Rhodes, H.


Davies, Clement (Montgomery)
Kirby, B. V.
Richards, R


Davies, Ernest (Enfteld)
Lawson, Rt. Hon J. J
Robens, A.


Davies, Harold (Leek)
Leonard, W.
Roberts, Emrys (Merioneth)


Davits, R. J. (Westhoughton)
Leslie, J. R.
Roberts, Goronwy (Caernarvonshire)







Robertson, J. J. (Berwick)
Steele, T.
Weitzman, D.


Rogers, G. H. R.
Stewart, Capt. Michael (Fulham, E.)
Wells, P. L. (Faversham)


Royle, C.
Strauss, G. R. (Lambeth, N.)
Wells, W. T. (Walsall)


Sargood, R.
Taylor, H. B. (Mansfield)
White, H. (Derbyshire, N.E.)


Scollan, T.
Taylor, R. J. (Morpeth)
Whiteley, Rt. Hon. W.


Scott-Elliot, W.
Taylor, Dr. S. (Barnet)
Wigg, Col. G. E.


Segal, Dr. S.
Thomas, I. O. (Wrakin)
Wilkes, Maj. L.


Shackleton, Wing-Cdr. E. A. A.
Thomas, John R. (Dover)
Wilkins, W. A.


Sharp, Lt.-Col. G. M
Thomas, George (Cardiff)
Willey, F. T. (Sunderland)


Shurmer, P.
Thorneycroft, H. (Clayton)
Willey, O. G. (Cleveland)


Silverman, S. S. (Nelson)
Thurtle, E.
Williams, D. J. (Neath)


Simmons, C. J.
Tiffany, S.
Williams, J. L. (Kelvingrove)


Skeffington, A. M.
Titterington, M. F.
Williams, Rt. Hon. T. (Don Valley)


Skeffington-Lodge, T. C.
Tolley, L.
Williams, W. R. (Heston)


Skinnard, F. W.
Tomlinson, Rt. Hon. G.
Williamson, T.


Smith, Capt. C. (Colchester)
Turner-Samuels, M.
Willis, E.


Smith, H. N. (Nottingham, S.)
Ungoed-Thomas, L.
Wills, Mrs. E. A.


Smith, S. H. (Hull, S.W.)
Viant, S. P.
Wilson, J. H.


Smith, T. (Normanton)
Wadsworth, G.
Wise, Major F. J


Snow, Capt. J. W.
Walkden, E.
Woodburn, A.


Solley, L. J.
Walker, G. H.
Woods, G. S.


Sorensen, R. W.
Wallace, G. D. (Chislehurst)
Wyatt, Maj. W


Soskice, Maj. Sir F
Wallace, H. W. (Waithamstow, E.)
Yates, V. F.


Sparks, J. A.
Warbey, W. N.



Stamford, W
Watkins, T. E.
TELLERS FOR THE NOES:




Mr. Pearson and Mr. Coldrick

Sir A. Gridley: I beg to move, in page 29, line 13, at the end, to insert:
in any claim by the body corporate and shall he attributed to the principal company of the group.
I do not propose to add to what I have already said, in view of your suggestion, Mr. Deputy-Speaker, that these Amendments should be considered together.

Sir P. Bennett: I beg to second the Amendment.

Question put, ''That those words be there inserted in the Bill."

The House divided: Ayes, 114; Noes, 267.

Division No. 252.]
AYES.
[8.35 p.m.


Allen, Lt.-Col. Sir W. (Armagh)
Hare, Lieut.-Col. Hn. J. H. (W'db'ge)
Peake, Rt. Hon. O.


Amory, D Heathcoat
Harvey, Air-Comdre. A. V.
Peto, Brig. C. H. M.


Assheton, Rt. Hon. R.
Headlam, Lieut.-Col. Rt. Hon. Sir C.
Pickthorn, K.


Astor, Hon.M.
Hinchingbrooke, Viscount
Pitman, I. J.


Baldwin, A. E.
Hogg, Hon. Q.
Ponsonby, Col. C. E.


Beamish, Maj. T. V. H
Holmes, Sir J. Stanley (Harwich)
Poole, O. B. S. (Oswestry)


Beechman, N. A.
Hope, Lord J.
Prescott. Stanley


Bennett, Sir P.
Howard, Hon. A
Raikes, H. V.


Birch, Nigel
Hudson, Rt. Hon. R. S. (Southport)
Rayner, Brig. R.


Bower, N.
Hurd, A.
Renton, D.


Boyd-Carpenter, J. A.
Hutchison, Lt.-Cm. Clark (E'b'rgh W.)
Robinson, Wing-Comdr. Roland


Braithwaite, Lt.-Comdr. J. G.
Jeffreys, General Sir G.
Ross, Sir R.


Bromley-Davenport, Lt.-Col. W.
Joynson-Hicks, Lt.-Cdr. Hon. L. W
Sanderson, Sir F


Buchan-Hepburn, P. G. T
Kingsmill, Lt.-Col. W. H.
Shephard, S. (Newark)


Butcher, H. W.
Lambert, Hon. G.
Smiles, Lt.-Col. Sir W.


Carson, E.
Lancaster, Col. C. G.
Spearman, A. C. M.


Challen, C.
Legge-Bourke, Maj. E. A. H
Stanley, Rt. Hon, O.


Clarke, Col. R. S.
Linstead, H. N.
Stoddart-Scott, Col. M.


Clifton-Brown, Lt.-Col. G.
Lipson, D. L.
Stuart, Rt. Hon. J. (Moray)


Conant, Maj. R. J. E.
Low, Brig. A. R. W
Teeling, William


Crookshank, Capt. Rt. Hon. H. F. C
Lucas, Major Sir J.
Thorneycroft, G. E. P. (Monmouth)


Crosthwaite-Eyre, Col. O. E-
Lucas-Tooth, Sir H.
Thornton-Kemsley, C. N.


Darling, Sir W. Y.
MacAndrew, Col. Sir C.
Thorp, Lt-Col. R. A. F


Digby, Maj. S. W.
Macdonald, Capt. Sir P. (I of Wight)
Touche, G. C.


Dodds-Parker, A. D.
Mackeson, Lt.-Col. H. R.
Turton, R. H.


Donner, Sqn.-Ldr. P. W
Macpherson, Maj. N. (Dumfries)
Vane, W M. T.


Drayson, Capt. G. B.
Maitland, Comdr. J. W.
Wakefield, Sir W. W


Drewe, C.
Manningham-Buller, R. E.
Walker-Smith, D.


Eccles. D. M.
Marlowe, A. A. H
Ward, Hon G. R.


Eden, Rt. Hon. A.
Marples, A. E.
Watt, Sir G. S Harvie


Fleming, Sqn.-Ldr. E. L.
Marshall, D. (Bodmin)
Wheatley, Colonel M. J.


Fletcher, W. (Bury)
Marshall, S. H. (Sutton)
White, J. B. (Canterbury)


Foster, J. G. (Northwich)
Maude, J, C
Williams, C. (Torquay)


Gage, Lt.-Col. C.
Madlicott, F.
Williams, Gerald (Tonbridge)


Galbraith, Cmdr. T. D
Mellor, Sir J.
Willoughby de Eresby, Lord


Glossop, C. W. H.
Molson, A. H. E.
York, C.


Gridley, Sir A.
Morrison, Maj. J. G. (Salisbury)



Grimston, R. V
Neven-Spence, Sir B.
TELLERS FOR THE AYES


Hannon, Sir P. (Moseley)
Osborne, C.
Sir Arthur Young and




Mr. Studholme




NOES


Adams, Richard (Balham)
Gaitskell, H. T. N
Neal, H (Claycross)


Adams, W. T. (Hammersmith, South)
Ganley, Mrs. C. S.
Nichol, Mrs. M. E. (Bradford, N.)


Alexander, Rt. Hon. A. V.
George, Lady M. Lloyd (Anglesey)
Nicholls, H. R. (Stratford)


Allen, A. C. (Bosworth)
Gibbins, J.
Noel-Buxton, Lady


Allen, Scholelield (Crewe)
Gibson, C. W
O'Brien, T.


Alpass, J. H.
Gilzean, A.
Oldfield, W. H.


Anderson, A. (Motherwell)
Glanville, J. E. (Consett)
Oliver, G. H


Attewell, H. C.
Goodrich, H. E.
Paget, R. T.


Austin, H. L
Gordon-Walker, P. C.
Paling, Rt. Hon Wilfred (Wentworth)


Awbery, S. S.
Greenwood, Rt. Hon. A. (Wakefield)
Palmer, A. M. F.


Ayles, W. H.
Greenwood, A. W. J. (Heywood)
Pargiter, G. A.


Ayrton Gould, Mrs. B
Grenfell, D. R.
Parkin, Flt.-Lieut. B. T


Bacon, Miss A.
Griffiths, D, (Rother Valley)
Paton, Mrs. F. (Rushcliffe)


Balfour, A.
Gunter, Capt. R. J.
Paton, J. (Norwich)


Barstow, P. G
Guy, W H.
Peart, Capt. T. F


Barton, C.
Hale, Leslie
Perrins, W.


Battley, J. R.
Hall, W. G. (Colne Valley)
Platts-Mills, J. F. F.


Bechervaise, A. E
Hamilton, Lieut.-Col R.
Porter, G. (Leeds)


Benson, G.
Hannan, W. (Maryhill)
Pritt, D. N.


Bing, G. H. C.
Hardy, E. A.
Proctor, W. T.


Binns, J.
Harrison, J
Pursey, Cmdr. H.


Blenkinsop, Capt A
Hastings, Dr. Somerville
Randall, H. E.


Boardman, H
Haworth, J.
Ranger, J.


Bowen, R.
Henderson, A. (Kingswinford)
Rees-Williams, D R.


Bowles, F. G. (Nuneaton)
Henderson, Joseph (Ardwick)
Reeves, J.


Braddock, Mrs. E. M. (L'pl. Exch'ge)
Hicks. G
Reid, T. (Swindon)


Braddock, T. (Mitcham)
Hobson, C. R
Rhodes, H.


Brook, D. (Halifax)
Holman P.
Richards, R


Brooks, T. J. (Rothwell)
Holmes, H. E. (Hemsworth)
Robens, A.


Brown, George (Belper)
House, G.
Roberts, Emrys (Merioneth)


Brown, T. J (Ince)
Hoy, J,
Roberts, Goronwy (Caernarvonshire)


Buchanan, G,
Hudson, J. H. (Ealing, W.)
Robertson, J. J. (Berwick)


Burden. T. W.
Hughes, Hector (Aberdeen, N.)
Rogers, G. H. R.


Burke, W. A.
Irving, W. J.
Royle, C.


Butler, H. W. (Hackney, S)
Isaacs, Rt. Hon. G. A.
Sargood, R.


Callaghan, James
Jeger, G. (Winchester)
Scollan, T.


Castle, Mrs. B. A.
Jones, D. T. (Hartlepools)
Scott-Elliot, W.


Chamberlain, R. A.
Jones, J. H. (Bolton)
Segal, Dr. S.


Champion, A. J.
Jones, P. Asterley (Hitchin)
Shackleton, Wing-Cdr. E A. A


Chater, D.
Keenan, W.
Sharp, Lt.-Col. G. M.


Chetwynd, Capt. G. R
Kenyon, C.
Shurmer, P


Clitherow, Dr. R
Key, C. W.
Silverman, S. S. (Nelson)


Cluse, W. S.
Kinley, J.
Simmons, C. J.


Cobb, F. A.
Kirby, B. V.
Skeffington, A. M.


Cocks F. S
Lawson, Rt. Hon. J. J.
Skeffington-Lodge, T. C


Coldrick, W.
Lee, F. (Hulme)
Skinnard, F. W.


Collick, P.
Leonard, W.
Smith, Capt. C. (Colchester)


Collindridge, F
Leslie, J. R.
Smith, H. N. (Nottingham, S.)


Collins, V. J.
Levy, B. W.
Smith, S. H. (Hull, S.W.)


Colman, Miss G. M
Lewis, A W. J. (Upton)
Smith, T. (Normanton)


Comyns, Dr. L.
Lindgren G. S.
Snow, Capt. J. W.


Cooper, Wing-Comdr. G.
Lyne, A. W.
Selley, L. J.


Corbet, Mrs. F. K. (Camb'well. N.W.)
McAdam, W.
Sorensen, R. W


Corlett, Dr. J.
McEntee, V. La T
Soskice, Maj Sir F


Cove, W. G.
McGhee, H. G
Sparks, J. A.


Crossman, R. H. S.
Mack, J. D.
Stamford, W.


Daggar, G.
McKay, J. (Wallsend)
Steele, T.


Daines, P.
McLeavy, F.
Strauss, G. R. (Lambeth, N.)


Dalton, Rt. Hon. H.
Macpherson, T. (Romford)
Taylor, H. B. (Mansfield)


Davies, Edward (Burslem)
Mainwaring, W. H.
Taylor, R. J. (Morpeth)


Davies, Clement (Montgomery)
Mallalieu, J. P. W
Taylor, Dr. S. (Barnet)


Davies, Ernest (Enfield)
Manning, Mrs. L. (Epping)
Thomas, I. O, (Wrekin)


Davies, Harold (Leek)
Marquand, H. A.
Thomas, John R. (Dover)


Davies, R. J. (Westhonghton)
Marshall, F. (Brightside)
Thomas, George (Cardiff)


Deer, G.
Martin, J. H.
Thorneycroft, H. (Clayton)


Diamond, J.
Mathers, G.
Thurtle, E.


Dobbie, W.
Medland, H. M.
Tiffany, S.


Dodds, N. N
Messer, F.
Titterington, M. F.


Donovan, T.
Middleton, Mrs. L.
Tolley, L.


Dugdale, J. (W Bromwich)
Mikardo, Ian
Tomlinson, Rt. Hon. G


Dumpleton, C. W.
Mitchison. Maj. G. R.
Turner-Samuels, M.


Durbin, E. F. M.
Monslow. W.
Ungoed-Thomas, L.


Dye, S.
Moody, A. S.
Viant, S. P.


Ede, Rt. Hon. J. C.
Morgan, Dr. H. B.
Wadsworth, G


Edwards, Rt. Hon. Sir C. (Bodwellty)
Morris, Lt.-Col. H. (Sheffield, C.)
Walkden, E


Edwards, John (Blackburn)
Morris, P. (Swansea, W.)
Walker, G. H.


Edwards, W. J. (Whitechapel)
Morrison, Rt. Hon. H. (Lewisham, E.)
Wallace, G. D. (Chislehurst)


Fletcher, E. G. M. (Islington, E.)
Mort, D. L.
Wallace, H. W. (Walthamstow, E.)


Follick, M.
Moyle, A.
Warbey, W N.


Foot, M. M.
Murray, J. D.
Watkins, T. E.


Forman, J. C.
Nally, W.
Weitzman, D.


Freeman, Mai. J. (Watford)
Naylor, T. E.
Wells, P. L. (Faversham)







Wells, W. T. (Walsall)
Williams, D. J. (Neath)
Wise, Major F. J.


White, H. (Derbyshire, N.E.)
Williams, J. L. (Kelvingrove)
Woodburn, A.


Whiteley, Rt. Hon. W
Williams, Rt. Hon. T. (Don Valley)
Woods, G. S.


Wigs, Col. G. E.
Williams. W. R (Heston)
Wyatt, Maj. W


Wilkes, Maj. L.
Williamson, T
Yates, V. F.


Wilkins, W. A.
Willis, E.



Willey, F. T (Sunderland)
Wills, Mrs. E. A
TELLERS FOR THE NOES


Willey, O. G. (Cleveland)
Wilson, J. H.
Mr. Pearson and




Captain Michael Stewart

Sir A. Gridley: I beg to move, in page 29, line 22, at the end, to insert:
in any claim by the body corporate and shall be attributed to the principal company of the group.

8.45 p.m.

Mr. C. Williams: I beg to second the Amendment.
I quite realise that it has been agreed that there shall be no discussion, but this is a most important Amendment. I regret the pathetic incompetence shown in the answers we have had on this series of Amendments.

Hon. Members: Speech.

Mr. Deputy-Speaker: It was agreed that we should have the discussion on the first of these three Amendments.

Mr. Williams: I merely added that I regretted —

Hon. Members: Order.

Mr. Deputy-Speaker: The hon. Gentleman is either making a speech or not making a speech. I say that he is making a speech.

Mr. Williams: I am not making a speech; I have said what was necessary to emphasise the point of incompetence.

Question put, "That those words be there inserted in the Bill."

The House divided: Ayes, 120; Noes, 269.

Division No. 253]
AYES
[8.45 p.m.


Allen, Lt.-Col. Sir W. (Armagh)
Harvey, Air-Comdre. A. V
Peto, Brig. C. H. M


Amory, D. Heathcoat
Headlam, Lieut.-Col. Rt. Hon. Sir C
Pickthorn, K.


Assheton, Rt. Hon. R
Hinchingbrooke, Viscount
Pitman, I. J.


Astor, Hon. M.
Hogg, Hon. Q.
Ponsonby, Col. C. E


Baldwin. A. E.
Holmes, Sir J. Stanley (Harwich)
Poole, O. B. S. (Oswestry)


Beamish, Maj. T. V. H
Hope, Lord J.
Prescott, Stanley


Beechman, N. A
Howard, Hon. A.
Raikes, H. V.


Bennett, Sir P
Hudson, Rt. Hop. R. S. (Southport)
Reed, Sir S. (Aylesbury)


Birch, Nigel
Hurd, A.
Renton, D.


Bower, N.
Hutchison, Lt-Cm. Clark (E'b'rgh W)
Robertson, Sir D. (Streatham)


Boyd-Carpenter, J. A.
Jeffreys, General Sir G.
Robinson, Wing-Comdr Rolano


Braithwaite, Lt,-Comdr. J. G.
Joynson-Hicks, Lt.-Cdr. Hon L W
Ross, Sir R.


Bromley-Davenport, Lt.-Col. W
Kingsmill, Lt.-Col. W. H.
Sanderson, Sir F.


Buchan-Hepburn, P. G. T.
Lambert, Hon. G.
Shephard, S. (Newark)


Butcher, H. W.
Lancaster, Col. C. G.
Shepherd, W. S. (Bucklow)


Butler, Rt. Hon. R. A. (Sffr'n Wld'n)
Legge-Bourke, Maj. E. A. H
Smiles, Lt.-Col. Sir W


Carson, E.
Linstead, H. N.
Spearman, A. C. M.


Challen, C.
Lipson, D. L.
Stanley, Rt. Hon. O


Clarke, Col. R. S.
Low, Brig. A. R. W.
Stewart, J. Henderson (Fife, E.)


Clifton-Brown, Lt.-Col. G
Lucas, Major Sir J.
Stoddart-Scott, Col. M.


Conant, Maj. R. J. E.
Lucas-Tooth, Sir H.
Stuart, Rt. Hon. J. (Moray)


Crookshank, Capt. Rt. Hon. H. F. C
MacAndrew, Col. Sir C.
Teeling, William


Crosthwaite-Eyre, Col. O. E.
Macdonald, Capt. Sir P. (I. of Wight)
Thorneycroft, G. E. P. (Monmouth)


Darling, Sir W. Y.
Mackeson, Lt.-Col. H. R
Thornton-Kemsley, C. N.


Digby, Maj. S. W.
Macpherson, Maj. N. (Dumfries)
Thorp, Lt.-Col. R. A. F


Dodds-Parker, A. O.
Maitland, Comdr. J. W.
Touche, G. C


Donner, Sqn.-Ldr. P. W.
Manningham-Buller, R E
Turton, R. H.


Drayson, G. B.
Marlowe, A. A. H
Vane, W. M. T.


Drewe, C.
Marples, A. E.
Wakefield, Sir W W


Eccles, D. M.
Marshall, D. (Bodmin)
Walker-Smith, D.


Eden, Rt. Hon. A.
Marshall, S H. (Sutton)
Ward, Hon. G. R.


Fleming, Sqn.-Ldr. E. L.
Maude, J. C
Watt, Sir G. S. Harv


Fletcher, W. (Bury)
Medlicott, F.
Whcatlcy, Colonel M. J.


Foster, J. G (Northwich)
Mollor, Sir J.
White, J. B. (Canterbury)


Gags, Lt.-Col C.
Molson, A. H. E.
Williams, C. (Torquay)


Galbraith, Cmdr. T D.
Morris-Jones, Sir H.
Williams, Gerald (Tonbridge)


Glossop, C. W. H
Morrison, Maj. J. G. (Salisbury)
Willoughby de Eresby, Lord


Gridley, Sir A.
Neven-Spence, Sir B.
York, C.


Grimston, R. V.
Orr-Ewing, I. L



Hannon Sir P. (Moseley)
Osborne, C.
TELLERS FOR THE AYES


Hare, Lieut-Col. Hn. J. H. (W'db'ge)
Peake, Rt. Hon. O.
Sir Arthur Young and




Mr Studholme




NOES


Adams, Richard (Balham)
Gaitskell, H. T. N
Neal, H. (Claycross)


Adams, W. T. (Hammersmith, South)
Ganley, Mrs. C. S.
Nichol, Mrs. M. E. (Bradford, N.)


Alexander, Rt. Hon. A V.
George, Lady M. Lloyd (Anglesey)
Nicholls, H. R. (Stratford)


Allen, A. C. (Bosworth)
Gibbins, J.
Noel-Buxton, Lady


Allen, Scholefleld (Crewe)
Gibson, C. W
O'Brien, T.


Alpass, J. H.
Gilzean, A.
Oldfield, W. H


Anderson, A. (Motherwell)
Glanville, J. E. (Consett)
Oliver, G. H.


Attewell, H. C
Goodrich, H. E.
Paget, R. T.


Austin, H L.
Gordon-Walker, P. C.
Paling, Rt. Hon. Wilfred (Wentworth)


Awbery, S. S.
Greenwood, Rt. Hon. A. (Wakefield)
Palmer, A. M. F.


Ayles, W. H,
Greenwood, A. W. J. (Heywood)
Pargiter, G. A.


Ayrton Gould, Mrs. B.
Grenfell, D. R.
Parkin, Flt.-Lieut. B. T.


Bacon, Miss A.
Griffiths, D. (Rother Valley)
Paton, Mrs. F. (Rushcliffe)


Balfour, A.
Gunter, Capt. R. J
Paton, J. (Norwich)


Barstow, P. G
Guy, W. H.
Pearson, A.


Barton, C.
Hale, Leslie
Peart, Capt. T F.


Battley, J. R.
Hall, W G. (Colne Valley)
Perrins, W.


Bechervaise, A E
Hamilton, Lieut.-Col. R
Plaits-Mills, J. F. F.


Benson, G
Hannan, W. (Maryhill)
Porter, G. (Leeds).


Bing, G. H. C.
Hardy, E. A.
Pritt, D. N.


Binns, J
Harrison, J.
Proctor, W. T.


Blackburn, A. R.
Hastings, Dr. Somerville
Pursey, Cmdr. H


Blenkinsop, Capt. A
Haworth, J.
Randall, H. E.


Boardman, H.
Henderson A. (Kingswinford)
Ranger, J.


Bowen, R.
Hicks, G.
Rees-Williams, D. R.


Bowles, F. G. (Nuneaton)
Hobson, C. R
Reeves, J.


Braddock, Mrs. E. M. (L'p'l, Exch'ge)
Holman, P.
Reid, T. (Swindon)


Braddock, T. (Mitcham)
Holmes, H. E. (Hemsworth)
Rhodes, H.


Brook, D. (Halifax)
House, G.
Richards, R.


Brooks, T. J. (Rothwell)
Hey, J.
Robens, A.


Brown, George (Belper)
Hudson, J. H. (Ealing, W.)
Roberts, Emrys (Merioneth)


Brown, T, J. (Ince)
Hughes, Hector (Aberdeen, N.)
Roberts, Goronwy (Caernarvonshire)


Buchanan, G.
Irving, W. J.
Robertson, J. J. (Berwick)


Burden. T. W.
Isaacs, Rt. Hon. G. A
Rogers, G. H. R.


Burke, W. A.
Jeger, G. (Winchester)
Royle, C.


Butler, H. W. (Hackney, S.)
Jones, D T. (Hartlepools)
Sargood, R.


Cailaghan, James
Jones, J. H. (Bolton)
Scollan, T.


Castle, Mrs. B. A.
Jones, P. Asterley (Hitchin)
Scott-Elliot, W


Chamberlain, R. A
Keenan, W.
Shackleton, Wing-Cdr E A. A


Champion, A. J
Kenyon C.
Sharp, Lt.-Col G. M.


Chater, D.
Key, C. W.
Shawcross, C. N. (Widnes)


Chetwynd, Capt. G. R.
Kinley, J.
Shurmer, P


Ciltherow, Dr. R
Kirby, B. V.
Silverman, S. S. (Nelson)


Cluse, W. S.
Lawson, Rt. Han. J. J
Simmons, C. J.


Cobb, F. A.
Lee, F. (Hulme)
Skeffington, A. M


Cocks, F. S.
Leonard, W.
Skeffington-Lodge, F C.


Coldrick, W.
Leslie, J. R.
Skinnard, F. W.


Collick, P.
Levy, B. W.
Smith, Capt. C (Colchester)


Collindridge, F
Lewis, A. W. J. (Upton)
Smith, H N. (Nottingham, S.)


Collins, V. J.
Lindgren, G. S.
Smith, S. H. (Hull, S.W.)


Colman, Miss G. M.
Lyne, A. W.
Smith, T. (Normanton)


Comyns, Dr. L.
McAdam, W.
Snow, Capt, J. W.


Cooper, Wing-Comdr. G
McEnlee, V. La T
Solley, L. J.


Corbet, Mrs. F. K. (Camb'well, N.W.)
McGhee, H. G
Sorensen, R. W.


Corlett, Dr. J.
Mack, J D.
Soskice, Maj. Sir F


Cove, W. G.
McKay, J. (Wallsend)
Sparks, J. A


Crossman, R. H. S
Maclean, N. (Gevan)
Stamford, W.


Daggar, G.
McLeavy. F.
Steele, T.


Daines, P.
Macpherson, T. (Romford)
Strauss, G. R. (Lambeth, N.)


Dalton, Rt. Hon. H.
Mainwaring, W. H.
Taylor, H, B. (Mansfield)


Davies, Edward (Burslem)
Mallalieu, J. P. W.
Taylor, R. J. (Morpeth)


Davies, Clement (Montgomery)
Manning, Mrs. L. (Epping)
Taylor, Dr. S. (Barnet)


Davies, Ernest (Enfteld)
Marquand, H. A.
Thomas, I. O. (Wrekin)


Davies, Harold (Leek)
Marshall, F. (Brightside)
Thomas, John R. (Dover)


Davies, R. J. (Westhoughton)
Martin, J H
Thomas, George (Cardiff)


Deer, G.
Mathers, G,
Thorneycroft, H. (Clayton)


Diamond, J
Medland, H M.
Thurtle, E.


Dobbie, W.
Messer, F
Tiffany, S.


Dodds, N. N
Middleton, Mrs. L
Titterington, M. F.


Denovan, T.
Mikardo, Ian
Tolley, L.


Dugdale, J. (W. Bromwich)
Millington, Wing-Comdr. E. R
Tomlinson, Rt. Hon. G.


Dumpleton, C. W
Mitchison, Maj G. R
Turner-Samuels, M.


Durbin, E. F. M.
Monslow, W
Ungoed-Thomas, L


Dye, S.
Moody, A. S
Viant, S. P.


Ede, Rt. Hon. J. C.
Morgan, Dr. H. B.
Wadsworth G.


Edwards, Rt. Hon. Sir C. (Bedwellty)
Morris, Ll.-Col. H. (Sheffield, C.)
Walkden, E.


Edwards, John (Blackburn)
Morris, P (Swansea, W.)
Walker, G. H.


Edwards W. J. (Whitechapel)
Morrison, Rt Hon. H. (Lewisham, E.)
Wallace, G. D. (Chislehurst)


Fletcher, E. G M. (Islington. E.)
Mort, D. L.
Wallace, H. W. (Walthamstow, E.)


Follick, M.
Moyle, A.
Warbey, W. N.


Foot, M. M.
Murray, J. D.
Watkins, T. E.


Forman, J, C.
Nally, W.
Weitzman, D


Freeman, Maj J. (Watford)
Naylor, T. E
Wells, P. L. (Faversham)




Wells, W. T. (Walsall)
Williams, D. J. (Neath)
Woodburn, A.


White, H. (Derbyshire, N.E.)
Williams, J. L. (Kelvingrove)
Woods, G. S.


Whiteley, Rt. Hon. W.
Williams, Rt. Hon. T. (Don Valley)
Wyatt, Maj. W


Wigg, Col. G. E.
Williams, W. R. (Heston)
Yates, V. F.


Wilkes, Maj. L.
Williamson, T.



Wilkins, W. A.
Willis, E.
TELLERS FOR THE NOES:


Willey, F. T. (Sunderland)
Wills, Mrs. E. A.
Mr. Joseph Henderson and


Willey. O. G. (Cleveland)
Wise, Major F. J.
Captain Michael Stewart.

Sir P. Bennett: I beg to move, in page 29, line 22, at the end, to insert:
(12) Where, in pursuance of any enactment for the compulsory acquisition of a business or part of a business any assets are transferred to the Crown or to a corporate body created under that enactment or to a local authority designated under that enactment and at the date of the transfer the owner of the business produces to the Commissioners particulars of deferred repairs as defined by Subsection (4) of this Section required to be done to those assets and satisfies them that it was not possible for that work to be done by the date of transfer, the owner shall be deemed to have incurred the estimated cost of executing such deferred repairs in like manner as though he had executed them immediately prior to the date of transfer.
This is another question of deferred repairs, but regarded from a totally different angle. Of course, it is admitted that, shall I say, unnatural profits have been made due to the fact that people were unable to charge repairs during the war years. Therefore, the profits on which they paid Excess Profits Tax were swollen to an unreal extent. That is what is being dealt with in Clause 33. The Amendment provides for the deferred repairs which are carried out after the end of the Excess Profits Tax period when repairs are possible; they should be deferred back to the time when they ought to have been undertaken. This will not meet the case of businesses which, in the interim, have been nationalised. Those particular business men who have paid their taxes but will not, through any fault of their own, be continuing their businesses will not have the opportunity, which the Chancellor insists is the duty of the owner, to do the repairs; they will not be allowed.
The Chancellor realised there was a difference between firms of this description and ordinary firms, because he himself said that the nationalisation of industries is a procedure which evidently needs to be treated in an exceptional fashion from the Revenue point of view. Although the Government are clear that it is in the national interest to extend the field of nationalised industries, we do not wish, as a mere by-product of this process, to do injustice to those for whom the

right hon. Gentleman has spoken. Taking the Chancellor at his word, we are putting this forward. The business man who has paid his taxes and had his business nationalised, has paid Excess Profits Tax on profits which have been unduly increased by reason of the fact that during the war years he has been unable to carry out the repairs. The Amendment seeks to recognise that position and allow him to charge those wartime repairs, when he would normally have undertaken them. I will say no more now, because I am certain the Chancellor understands the point.

Sir A. Gridley: I beg to second the Amendment.
The first two lines of the Amendment show the narrow issue we seek to cover:
Where, in pursuance of any enactment for the compulsory acquisition of a business or part of a business any assets are transferred to the Crown or to a corporate body created under that enactment ….
Therefore, this Amendment is confined to those undertakings which are transferred from the present owners to the State, or any body, such as the Coal Board, which may acquire those assets. It hardly seems fair that where one has been prevented from carrying out very necessary repairs during the war years, and certain reserves have been made with the assent of the Commissioners of Inland Revenue for that purpose, that one should be in a position not to be credited with the allowances which have been made merely because the undertaking is transferred from a private owner to a public board or to the State. The Amendment speaks for itself and I do not need to go into it any further.

9.0 p.m.

The Solicitor-General: This Amendment involves much the same issues as the last one, and I pointed out in dealing with the last Amendment that this deferred repairs allowance really is a conditional right—conditional upon the repairs being carried out. In exactly the same way, this Clause, if the owner of the undertaking which is nationalised does not carry out the repairs, naturally provides, as a result,


that the right to earn the allowance lapses. This is, in other words, an Amendment which stands or falls by the Amendments which the House has just discussed. The considerations are very much the same. I would, however, add this, because I think that this is a circumstance of which hon. Gentlemen opposite may have lost sight: if the owner of an undertaking does have it nationalised, in point of fact he does not do so badly. It is not as if he altogether loses any allowance, because I am certain that the hon. Gentleman who moved the Amendment must remember the provisions of paragraph (3) of the Seventh Schedule to the Finance (No. 2) Act, 1939. The hon. Gentleman shakes his head, but we have referred to it before in the course of the Debate. I should like also to refer to paragraph (3) of the Eighth Schedule to the Finance (No. 2) Act, 1945, which supplements it. To put the thing in a nutshell, that provides for what is known as an exceptional depreciation allowance—which we have frequently referred to in the course of this Debate. The exceptional depreciation allowance, owing to circumstances connected with the war, is a right which the owner of the enterprise which is nationalised will enjoy. When the enterprise is taken over, that will constitute an event within the meaning of the Seventh Schedule to the 1939 Act which will crystallise his right to exceptional depreciation. If he gets that, at least it will go a good way to indemnifying him. Not only that, but because of the provision in the 1945 Act to which I have just referred, paragraph (3) of the Eighth Schedule to the Finance (No. 2) Act, 1945, the exceptional depreciation allowance will include the cost of repairs which have not been done, subject to a certain time limit, into which I need not go. Ordinarily, therefore, when the owner of an enterprise has it nationalised, although it is true that he will not have a deferred repairs allowance, he will have the exceptional depreciation allowance, which will include the great bulk of the repairs which have not been carried out.
Hon. Gentlemen will have noticed, when reading through these various Finance Acts, that a great many Sections in them prevent the relief granted by way of exceptional depreciation and by way of allowance for deferred repairs from overlapping. They will have noticed, over and

over again, that when the Acts refer to one they say that it shall be instead of the other. The two do overlap, and although they lose the deferred repairs allowance they will, as I say, have something which will come very near to compensating them for that loss. They really will not be very hardly treated. It would be impossible, and quite contrary to the spirit of the E.P.T. legislation to allow them, instead of the exceptional depreciation allowance, a deferred repairs allowance. It would mean the owner of the business would be getting an allowance, or not getting an allowance, according to whether the State, or the corporation which took over the nationalised enterprise, were carrying out the repairs or not The owner's right would vary, therefore, according to the action or to the will of his successor, which is entirely undesirable from the commercial point of view. His right depends on his carrying out repairs. If he carries out repairs, he carries out the condition which converts his potential right to allowance to an actual right. Therefore, if these repairs are not carried out by the time the enterprise is nationalised, he is to have an exceptional depreciation allowance extended to cover the repairs he has not carried out, in the way I have indicated. For these reasons, in addition to those I gave when arguing against the last Amendment, I would ask the House, as a logical consequence, to negative this Amendment.

Mr. I. J. Pitman: This is, obviously, a highly complicated matter, and it seems to me that the best way of handling it is to try to deal with concrete cases. As a concrete case, may I suggest a small transport man with his own small fleet of lorries? As I understand the situation, he has been showing but not really earning a greater profit during the war years, by reason of the fact that he has been using up the capital of his lorries by wearing and tearing them, through his inability to get the repairs done and he ends up the war with a potential claim to a refund of E.P.T. if and when he carries out these repairs, which are clearly overdue on these lorries. He then, before he can do so, is, under our hypothesis, taken over as a going concern. It should be noted that it is not through any fault of his that he has not done and cannot do his repairs; it is because of the state of the repairing market, and he just


cannot get the job done. Moreover, that being so, I do not see how this exceptional depreciation allowance comes into the picture at all. I do not see that exceptional depreciation in a past year, which is over and gone, comes in, unless depreciation means, in this context, something quite different from the normal meaning attached to "depreciation." Depreciation is something by which one's profits of a past year have, in fact, been reduced, and it does not seem to me that this can be at all a benefit to anybody when he is nationalised. It seems to me that the case against this Amendment has not been adequately put forward. If the hon. and learned Solicitor-General had said that he wished to alter this Amendment, so that it was a case of satisfying somebody that the repairs would have been done if the man could only have done them, then that would have been another story; but he is giving us here a flat negative, on what seems to me to be a great hardship to a small transport operator.

Mr. James Callaghan: This is an astonishing Amendment. I should have thought there was no justification at all for this type of allowance. It means, if we take the illustration of the hon. Member for Bath (Mr. Pitman), that the proprietor of the lorries hands them over to the State in a condition in which they are largely worn out. That is not much of a bargain for the State, but assuming the State takes them over, the hon. Member goes on to say that not only should the State be responsible for replacing those lorries at its own expense, but that the owner of the lorries should be recompensed for having not replaced them. In other words, we are being asked that the State should give the proprietor an allowance in respect of repairs which he has not done, and that the State should then do them for him, There is, of course, the question of loss of capital and other matters of that sort, but if we reduce this highly technical point to a simple statement, that, in fact, is the position. How can we ask that the State should pay a man an allowance in respect of repairs which he has not carried out, and that the State should then carry out those repairs? I submit that no one would really suggest this is a proper thing to do, despite the loss of capital involved, and for that reason, and for the valid arguments advanced by the Solicitor-

General, I see no justification for the Amendment.

Sir P. Bennett: Surely a man selling a motor vehicle would expect a bigger price if he had spent money on it, than if he sold it worn out? What has happened is that the State has taken away the money which he was going to spend on it and has left him with a derelict vehicle.

Mr. Callaghan: If I sold a motor car which had to be decarbonised I would not expect the purchaser to pay me as much for it as if I had decarbonised it, and then expect him to have it done at his own expense.

Mr. Stanley: I agree that this is a very technical point. I will not attempt to introduce into my few remarks the question of the Seventh Schedule to the Act of Ion to which the Solicitor-General referred. If I had it set out in my brief, as he has it set out in his, I should, of course, be glad to deal with it.

Mr. Pritt: Rather sad that the right hon. Gentleman has not got a nice brief.

Mr. Stanley: I have not perhaps got so much to call upon. My hon. Friend the' Member for Bath (Mr. Pitman) put a concrete case to which, with all respect, the. hon. Member for South Cardiff (Mr. Callaghan) has not given an answer. It seems to me that there may be, and the. Chancellor of the Exchequer has recognised this in a previous speech, a hardship as between the individual whose business is nationalised, and his next-door neighbour whose business is not nationalised. We had the case put to us of a small transport owner whose business is nationalised, his lorries having been allowed to run down because of lack of repairs during the war. His business is, taken over by the State, and presumably it is taken over at a fair value, which is a much deflated value. Alongside, we have a man who makes wireless sets, and he is in the same position. He cannot get repairs done, but he is to carry on with his business, and when the repairs situation becomes easier he is able to do them at the expense of the State, because he claims against his 100 per cent. E.P.T. His capital assets are therefore fully restored to their maximum value at the expense of the State. The lorry owner has had his capital assets taken over by the State at a very much deflated value, and never, therefore, can have the value restored.
It seems that between those two cases there is a great hardship upon the individual whose business is to be nationalised. Apart from that, one can see hardship in another way, if one takes the question of the data on which this hypothetical nationalisation is to take place. If it takes place a year or two ahead—if it is an industry well behind in the queue —by that time the repair situation has got easier, and the individual has managed to get his repairs done, then he will have had them done against E.P.T. rebate. His capital assets will be restored to their value, and, presumably, if the State takes them over thy will do so at full value. If he is unlucky, and further ahead in the queue, or if he is unlucky and the repair situation to meet his particular requirements is rather more behind hand, then, if he has not got the repairs done, he gets his capital assets taken over by the State at the deflated value. It seems to me that there are obvious chances that there will be hardship as between one individual and another; as between the individual who is nationalised and the individual who is not. I hope the Chancellor of the Exchequer has recognised the fact that nationalisation must not be allowed to impose unfairness upon the individual whose business is taken over in the supposed interest of the State, and that, having recognised that, he will see that this is a case where allowance should he made.

9.I5 p.m.

Mr. Pargiter: It would seem to me that none of the hon. Members who have spoken on this matter have carried their arguments to their logical conclusion. The only payment made by the State may not be the actual cost of the lorry at the time it is taken over; in fact it may be the earning capacity of the business which will be reflected in the figure of E.P.T. If he gets it in one way, he cannot possibly get it in the other, if the argument is continued to that point, it will be seen that if he has not paid out money in repairs, he has shown it as additional earning capacity, and if he has paid out money in repairs it cannot be shown as earning capacity.

Mr. Pitman: Do I understand from that, that the valuation of assets to be taken over by the Government in such a situation will take account of provision for deferred repairs, and that matters of

that kind can be added back to the profit for the purpose of valuation?

Mr. Pargiter: I said that he would be quoting what his earning capacity is and what his profits are, and if he has not paid out in repairs that will b' shown in another way.

Sir William Darling: In this interesting discussion of the example given by the hon. Member for Bath (Mr. Pitman) and carried on by the right hon. Member for West Bristol (Mr. Stanley), I would suggest to the Chancellor of the Exchequer and his friends that it is not only the road haulage business that we have in mind but many other industries. Have right hon. Gentlemen opposite considered what is going to happen to municipal gasworks which may be taken over by His Majesty's Government? I know a good deal about municipal gasworks. [Laughter.] I thought that feeble joke had tong since died. The gas industry, like all other industries, has had a difficult task. It has not been able to carry out improvements and necessary repairs in its plant because of the national economy It has not had the labour, materials or the desire to do so and the plant today is six years' depreciated. The maintenance of pressure plant is an expensive and costly matter and there have been six years of what one might term neglect. Many such plants would be totally unworkable except for the very good repairs done to them after six years of comparative neglect.
What is the Chancellor's position? He is going to allow nothing. This is not a little road haulage business which one could stamp beneath one's feet as a man does a beetle. It is a municipal undertaking we are talking about. The municipalities of this country will not like this story that they are not to be allowed full value for their depreciation and for their other assets. Is it recognised that the greater part of the industry of this country has been run down to an unparalleled extent, and what would have been a prosperous business if maintenance and repairs and development had been carried out, is, we fear, merely the bones of the enterprise. I think that if the Government look at it from that point of view and not from the point of view of the nationalisation of some private enterprise, they will see that they are going


to be faced with political and economic difficulties, and I say, with a knowledge of municipal history, that when the Government take over the trams, buses, gas, electricity and water, that will be plain. In that industry, too, they will find keen and competent accountants whose wits are as sharp as those supporting the road haulage or any private enterprise.
There is another aspect of the matter. The valuation of an enterprise to be taken over will be made at the date on which it is formally annexed. Whatever will be the best calculation is unimportant for my argument, but the payments made will be made in a currency which is much depreciated. An asset worth X in 1939 would not in 1946 be worth merely X minus six years' depreciation, because the money

from which the remuneration to the owners of the undertaking will be taken will be very changed in character and standard. That consideration may be ignored in dealing with private enterprises like road haulage, but it will not be ignored in dealing with the tough-minded local authorities, who are getting alarmed at the incursions which are being made into their system all over the country. I beg the Government to look at this matter again and to think seriously about it before seeking trouble with the local authorities. As a friend of the Government, though an outspoken friend, I ask them to think again.

Question put, "That those words be there inserted in the Bill."

The House divided: Ayes, 118; Noes, 271.

Division No. 254.]
AYES.
[9.25 p.m.


Allen, Lt.-Col. Sir W. (Armagh)
Hogg, Hon. Q.
Prescott, Stanley


Amory, D. Heathcoat
Holmes, Sir J. Stanley (Harwich)
Raikes, H. V.


Assheton, Rt. Hon. R
Hope, Lord J.
Reed, Sir S. (Aylesbury)


Astor, Hon. M.
Howard, Hon. A
Renton, D.


Baldwin A. E.
Hudson, Rt. Hon. R. S. (Southport)
Robertson, Sir D. (Streatham)


Beamish, Maj. T. V. H
Hurd, A.
Robinson Wing-Comdr. Roland


Beechman, N. A
Hutchison, Lt.-Cm. Clark (E'b'rgh W.)
Ross, Sir R.


Bennett, Sir P.
Jeffreys, General Sir G.
Sanderson, Sir F.


Birch, Nigel
Joynson-Hicks, Lt.-Cdr. Hon. L. W.
Shepherd, S. (Newark)


Bower, N.
Kerr, Sir J. Graham
Shepherd, W. S. (Bucklow)


Boyd-Carpenter, J A.
Kingsmill, Lt.-Col. W. H
Smiles, Lt.-Col Sir W.


Braithwaite, Lt.-Comdr. J. G
Lambert, Hon. G.
Spearman, A. C. M.


Buchan-Hepburn, P. G. T.
Lancaster, Col. C. G.
Stanley, Rt. Hon. O.


Butcher, H. W.
Legge-Bourke, Maj. E. A. H.
Stewart, J. Henderson (Fife, E.)


Butler, Rt. Hon. R. A. (S'ffr'n W'ld'n)
Linstead, H. N.
Stoddart-Scott, Col. M.


Carson, E.
Lipson, D. L.
Stuart, Rt. Hon. J. (Moray)


Challen, C.
Low, Brig. A. R. W.
Studholme, H. G.


Clarke, Col. R. S.
Lucas, Major Sir J.
Taylor, C. S. (Eastbourne)


Clifton-Brown, Lt.-Col. G.
Lucas-Tooth, Sir H.
Teeling, William


Crookshank, Capt. Rt. Hon. H. F. C
Macdonald, Capl. Sir P. (I. of Wight)
Thorneycroft, G. E. P. (Monmouth)


Crosthwaite-Eyre, Col. O. E.
Mackeson, Lt.-Col. H. Ft.
Thornton-Kemsley, C. N.


Crowder, Capt. J. F. E.
Macpheraon, Maj. N. (Dumfries)
Thorp, Lt.-Col. R. A. F.


Darling, Sir W. Y.
Maitland, Comdr. J. W.
Touche, G. C.


Digby, Maj. S. W
Manningham-Bulfer, R. E.
Turton, R. H.


Dodds-Parker, A. D.
Marples, A. E.
Vane, W. M. T.


Donner. Sqn.-Ldr. P. W
Marshall, D. (Bodmin)
Wakefield, Sir W. W


Drayson, G. B.
Marshall, S. H. (Sutton)
Walker-Smith, D.


Eccles, D M.
Maude, J. C.
Ward, Hon. G. R.


Eden.Rt. Hon. A.
Medlicott, F.
Watt, Sir G. S. Harvie


Fleming, Sqn.-Ldr. E. L.
Mellor, Sir J.
Wheatley, Colonel M. J.


Fletchor, W. (Bury)
Morris-Jones, Sir H.
White, J. B. (Canterbury)


Foster, J. G. (Northwich)
Morrison, Maj. J. G. (Salisbury)
Williams, C. (Torquay)


Gage, Lt.-Col. C.
Neven-Spence, Sir B.
Williams, Gerald (Tonbridge)


Galbraith, Cmdr. T D.
Nicholson, G.
Willoughby de Eresby, Lord


Glossop, C. W. H
Orr-Ewing, I. L
York, C.


Gridley, Sir A.
Osborne, C.
Young, Sir A. S. L. (Partick)


Grimston, R. V.
Peake, Rt. Hon. O.



Hannon, Sir P. (Moseley)
Peto, Brig. C. H. M
TELLERS FOR THE AYES


Man, Lieut-Col. Hn. J. H. (W'db'ge)
Pitman, I. J.
Mr. Drewe and


Harvey, Air-Comdre. A. V.
Ponsonby, Col. C. E.
Major Conant.


Headlam, Lieut.-Col. Rt. Hon. Sir C
Poole, O. B. S. (Oswestry)





NOES


Adams, Richard (Balham)
Austin, H. L.
Bechervaise, A. E.


Adams, W. T. (Hammersmith, South)
Awbery, S. S.
Benson, G.


Alexander, Rt. Hon. A. V.
Ayles, W. H.
Bing, G. H. C


Allen, A. C. (Bosworth)
Ayrton Gould, Mrs. B
Binns, J.


Allen, Scholefield (Crewe)
Bacon, Miss A.
Blackburn, A. R.


Alpass, J H.
Balfour, A.
Blenkinsop, Capt. A.


Anderson, A. (Motherwell)
Barstow, P. G
Boardman, H.


Anderson, F. (Whitehaven)
Barton, C.
Bowen, R.


Attewell, H. C.
Battley, J. R
Bowles, F. G. (Nuneaton)




Braddock, Mrs. E. M. (L'p'l, Exch'ge)
Hobson, C. R.
Reeves, J.


Braddook, T. (Mitcham)
Holman, P.
Reid, T. (Swindon)


Brook, D. (Halifax)
Holmes, H. E. (Hemsworth)
Rhodes, H.


Brooks, T. J. (Rothwell)
House, G.
Richards, R.


Brown, George (Belper)
Hoy, J.
Robens, A.


Brown, T. J. (Ince)
Hudson, J. H. (Ealing, W.)
Roberts, Emrys (Merioneth)


Buchanan, G.
Hughes, Hector (Aberdeen, N.)
Roberts, Goronwy (Caernarvonshire)


Burden. T. W.
Irving, W. J.
Robertson, J. J. (Berwick)


Burke, W. A.
Isaacs, Rt. Hon. G. A
Rogers, G. H. R.


Butler, H. W. (Hackney, S.)
Jeger, G. (Winchester)
Royle, C.


Callaghan, James
Jones, D. T. (Hartlepools)
Sargood, R.


Castle, Mrs. B. A.
Jones, J. H. (Bolton)
Scollan, T.


Champion, A. J.
Jones, P. Asterley (Hitchin)
Scott-Elliot, W.


Chater, D.
Keenan, W.
Segal, Dr. S.


Chetwynd, Capt. G. R.
Kenyon, C.
Shackleton, Wins Com E. A. A


Clitherow, Dr. R
Key, C. W.
Sharp, Lt.-Col. G. M.


Cluse, W. S.
Kinghorn, Sqn.-Ldr. E.
Shawcross, C. N. (Widnes)


Cobb, F. A.
Kinley, J.
Shurmer, P.


Cocks, F. S.
Kirby, B. V.
Silverman, S. S. (Nelson)


Coldrick, W.
Lawson, Rt. Hon. J. J.
Simmons, C. J.


Collick, P.
Lee, F. (Hulme)
Skeffington, A. M.


Collindridge, F.
Leonard, W.
Skeffington-Lodge, T. C


Collins, V. J.
Leslie, J. R.
Skinnard, F. W.


Colman, Miss G. M.
Levy, B. W.
Smith, Capt. C. (Colchester)


Comys, Dr. L.
Lewis, A. W. J. (Upton)
Smith, H. N. (Nottingham, S.)


Cooper, Wing-Comdr. G.
Lindgren, G. S.
Smith, S. H. (Hull, S.W.)


Corbet, Mrs. F. K. (Camb'well, N.W.)
Lyne, A. W.
Smith, T. (Normanton)


Corlett, Dr. J.
McAdam, W.
Snow, Capt. J. W


Cove, W. G.
McEntee, V. La T
Solley, L. J.


Crawley, Fit.-Lieut. A.
McGhee, H. G
Sorensen, R. W.


Crossman, R. H. S.
Mack, J. D.
Soskice, Maj. Sir F


Daggar, G.
McKay, J. (Wallsend)
Sparks, J. A.


Daines, P.
Maclean, N. (Govan)
Stamford, W.


Dalton, Rt. Hon. H.
McLeavy. F
Steele, T.


Davies, Edward (Burslem)
Macpherson, T. (Romford)
Taylor, H. B. (Mansfield)


Davies, Clement (Montgomery)
Mainwaring, W. H.
Taylor, R. J. (Morpeth)


Davies, Ernest (Enfield)
Mallalieu, J. P. W.
Taylor, Dr. S. (Barnet)


Davies, Harold (Leek)
Manning, Mrs. L. (Epping)
Thomas, I. O. (Wrekin)


Davies, R. J. (Westhoughton)
Marquand, H. A.
Thomas, John R. (Dover)


Deer, G.
Marshall, F. (Brightside)
Thomas, George (Cardiff)


Diamond, J.
Mathers, G.
Thorneycroft, H. (Clayton)


Dobbie, W.
Medland, H M.
Thurtle, E.


Dodds, N. N.
Messer, F.
Tiffany, S.


Donovan, T.
Middleton, Mrs. L
Titterington, M. F.


Dugdale, J. (W. Bromwich)
Mikardo, Ian
Tolley, L.


Dumplelon, C. W.
Millington, Wing-Comdr. E. R
Tomlinson, Rt. Hon. G.


Durbin, E. F. M.
Mitchison Maj. G. R.
Turner-Samuels, M.


Dye, S.
Monslow, W.
Ungoed-Thomas, L.


Ede, Rt. Hon. J. C.
Moody, A. S
Viant, S. P.


Edelman, M.
Morgan, Dr. H. B.
Walkden, E.


Edwards, Rt. Hon. Sir C. (Bedwelty)
Morris, Lt.-Col. H. (Sheffield, C.)
Walker, G. H


Edwards, John (Blackburn)
Morris, P. (Swansea, W.)
Wallace, G. D. (Chislehurst)


Edwards, W. J. (Whitechapel)
Morrison, Rt Hon. H. (Lewisham, E.)
Wallace, H. W. (Walthamstow, E.)


Fletcher, E. G. M. (Islington, E.)
Mort, D. L.
Warbey, W. N.


Follick, M.
Moyle, A.
Watkins. T. E


Foot, M. M.
Murray, J. D.
Weitzman, D


Forman, J. C.
Nally, W.
Wells, P. L. (Faversham)


Freeman, Maj. J. (Watford)
Naylor, T. E.
Wells, W. T. (Walsall)


Gaitskell, H. T. N.
Neal, H. (Claycross)
White, H. (Derbyshire, N.E.)


Ganley, Mrs. C. S.
Nichol, Mrs. M. E. (Bradford. N.)
Whiteley, Rt. Hon. W.


George, Lady M. Lloyd (Anglesey)
Nicholls, H. R. (Stratford)
Wigg, Col. G. E.


Gibbins, J.
Noel-Buxton, Lady
Wilkes, Maj. L.


Gibson, C. W.
O'Brien, T.
Wilkins, W. A.


Gilzean, A.
Oldfield, W. H
Willey, F. T (Sunderland)


Glanville, J. E. (Consett)
Oliver, G. H.
Willey, O. G (Cleveland)


Goodrich, H. E.
Paget, R. T.
Williams, D. J. (Neath)


Gordon-Walker, P. C.
Paling, Rt. Hon. Wilfred (Wentworth)
Williams, J. L. (Kelvingrove)


Greenwood, Rt. Hon. A. (Wakefield)
Palmer, A. M. F.
Williams, Rt. Hon. T. (Don Valley)


Greenwood, A. W. J. (Heywood)
Pargiter, G. A.
Williams, W. R. (Heston)


Grenfell, D. R.
Parkin, Flt-Lieut. B. T.
Williamson, T.


Griffiths, D. (Rother Valley)
Paton, Mrs. F. (Rushcliffe)
Willis, E.


Gunter, Capt. R. J.
Paton, J. (Norwich)
Wills, Mrs. E. A.


Guy, W. H.
Pearson, A.
Wilson, J. H.


Hate, Leslie
Peart, Capt. T. F
Wise, Major F. J.


Hall, W. G. (Colne Valley)
Perrins, W.
Woodburn, A.


Hamilton, Lieut.-Col. R.
Platts-Mills, J. F. F.
Woods, G. S.


Hannan, W. (Maryhill)
Porter, G. (Leeds).
Wyatt, Maj. W


Hardy, E A.
Pritt, D. N.
Yates, V. F.


Harrison, J.
Proctor, W. T.



Hastings, Dr. Somerville
Pursey, Cmdr. H
TELLERS FOR THE NOES:


Haworth, J.
Randall, H. E.
Mr. Joseph Henderson and


Henderson, A. (Kingswinford)
Ranger, J.
Captain Michael Stewart.


Hicks, G.
Rees-Williams, D. R.



Question put, and agreed to.

CLAUSE 37.—(Cancellation costs.)

9.30 p.m.

The Solicitor-General: I beg to move, in page 32, line 35, to leave out "terminating," and to insert:
termination, whether by agreement or otherwise.''
This Amendment is designed to meet a point which was made by the hon. and learned Member for Daventry (Mr. Manningham-Buller). The Clause deals with cancellation costs, and as it reads at the moment, it includes only such costs as are incurred by way of compensation paid for the purpose of determining a contract. The point made by the hon. and learned Member for Daventry was that the ambit of the Clause should be somewhat extended to include damages which had to be paid necessarily as the result of terminating a contract. If the claimant in respect of cancellation costs found himself in the position in which he could not determine the contract by paying compensation or by negotiation, and determined it without having agreed upon terms as to determination, and in consequence was held liable in damages to the other party, the hon. and learned Member for Daventry made the point that he should be entitled to claim as cancellation costs the amount of those damages.
The Amendment which I have moved would extend the definition of the costs in such a way as to include an amount of damages awarded by a court. That is a concession to the point of view adduced from the other side of the Committee by the hon. and learned Gentleman the Member for Daventry (Mr. Manningham-Buller). I ask the House to say that it is fair and right and to approve this Amendment.

Mr. C. Williams: I have on occasions been rather unkind to the hon. and learned Gentleman but I should like now to say quite shortly that I appreciate the fact that he has accepted the point of view of my hon. and learned Friend the Member for Daventry (Mr. ManninghamBuller). I feel sure that this will be a general improvement, and I regret that my hon. and learned Friend was not present to thank the hon. and learned Gentleman personally.

Amendment agreed to.

Sir P. Bennett: I beg to move, in page 32, line 39, to leave out from

surrendered," to the end of the Subsection, and to insert:
in connection with any event forming the ground for a claim for rehabilitation costs as defined by subsection (5) of section thirty-three of this Act.''
We are still on the question of cancellation costs and the present Amendment puts this position forward. In introducing this Clause the Chancellor has recognised that contracts which are alleged terminal expenses should be set against excess profits but as the Clause is drafted it is very narrow because it applies only to leases or such contracts as arc surrendered as a consequence of determination of a contract for the provision of goods or services which were used during the war years. That narrows the relief because many contractors have taken dispersal premises arid will in many, perhaps the majority, of cases not have cancelled the leases arising out of these immediately on the cancellation of the war contras:. The supposition that directly a war contract is over the contractor will be able to cancel all his leases, vacate his dispersed premises and close down is quite erroneous. He will have to make many arrangements and very often the dispersed premises will be on his hands for other purposes such as peacetime production. These arrangements are made by war contractors and traders whose business has been dislocated by the war and for that reason they will carry on. I know of many businesses where the original works have been completely upset; the companies have been instructed by the Government to take over dispersed premises, which they would like to close down because they are expensive to run but they cannot do so because they have not yet been able to get their main factories back to proper working conditions.
In these circumstances we feel that an Amendment which was refused in Committee because it opened the door too wide has a great deal to be said for it. Accordingly we have redrafted it and suggest the present Amendment, the effect of which would be that parallel to the claim of any person for rehabilitation costs the costs of cancellation of contracts should also be the subject of relief. We feel that this would allow the kind of case to which I have referred, and which was put forward on the Committee stage, to benefit without in any way making the position so wide that others would benefit who ought not to benefit.

Sir A. Gridley: I beg to second the Amendment.

The Solicitor-General: I am sorry, but we feel that we cannot possibly accept the Amendment. It is very difficult to understand exactly what it means or how far it would go. I should have thought it was extremely doubtful whether it would confer the measure of relief which the Clause as it stands confers. Clause 37 has a very specific and clearly definable object. If the claimant himself was supplying war goods under contract, and has lost that contract because the war has come to an end, he can claim, as cancellation costs, those costs which he has incurred in terminating contracts which he had for the supply of goods to him. That is perfectly intelligible, and is what the Clause as at present drafted provides. One must have clearly defined circumstances in which the rights of cancellation costs will arise. As the Clause stands at present that right to qualify is clearly intelligible. The Clause provides a clearly defined field.
What the Amendment does I really do not know. What the words
in connection with any event forming the ground for a claim for rehabilitation costs
extend to, it is impossible to say. They are hopelessly vague. They might mean anything or nothing. They might extend to almost anything or they might include practically nothing. This is not a good bit of drafting, and certainly does not improve upon the Clause as at present worded. I therefore ask the House to say that the Amendment does not carry matters any further, and must be rejected.

Amendment negatived.

Amendments made:

In page 32, line 40, after "termination," insert "whether by agreement or otherwise."

In page 33, line 3, at the end, insert "as aforesaid."—[The Solicitor-General.]

The Solicitor-General: I beg to move, in page 33, line II, at the end, to insert:
or, if the circumstances so require, until such later date as the Commissioners may allow, being a date not later than the end of the year nineteen hundred and forty-nine.
This is another concession to the point of view advanced by the right hon. Member for the Scottish Universities (Sir J.

Anderson). Hon. Members will remember that, in respect of terminal expenses, the Government have moved and the House has approved an Amendment extending the qualifying period from the end of 1948 to such period as the Commissioners think proper, not being later than the end of 1949. That was in relation to terminal expenses under Clause 33. The Amendment I move is precisely analogous, doing the same thing in relation to cancellation costs. Having approved the one the House is asked to say that it is only right and proper, as a necessary corollary, to approve the other.

Mr. I J. Pitman: I would like to take the opportunity of thanking the Chancellor of the Exchequer, through the Solicitor-General, for this Amendment. I take it that the Amendment largely meets the purpose of an Amendment which was proposed just now relating to any firm which had dispersed its factories as a result of Government orders and has to continue in those dispersed premises until 1949. I hope that the Chancellor will not bar the door too quickly at a later stage, against a further extension beyond 1949 if there are still cases in which hardship is being done. This is allowing the principle that it will take quite a time to clear up the mess of the war, and if there should be, as two hon. Members have said there might be, instances where hardship would be done through the too rigid application of a time limit, I hope it will be open to make a further Amendment later. Meanwhile I thank the Chancellor for this.

Amendment agreed to.

Further Amendment made:

In page 33, line 14, after "termination, "insert" whether by agreement or otherwise."—[The Solicitor-General.]

CLAUSE 42.—(Gifts inter vivos, etc.)

The Solicitor-General: I beg to move, in page 36, line 8, to leave out "and two years."
This and the succeeding Amendments deal with a point made by the hon. Member for Twickenham (Mr. Keeling) which the Chancellor of the Exchequer accepted in principle during the Committee stage. Clause 42 is the Clause which deals with gifts inter vivos and extends the period from three years to five years in the case of ordinary gifts


and one year to two years in the case of charitable gifts. The argument addressed to the Committee by the hon. Member for Twickenham was that the period should not be extended in the case of charitable gifts. My right hon. Friend, after having heard the arguments, thought that a case was made out for that, and undertook, if the hon. Member for Twickenham would withdraw his Amendment, to put down an Amendment suitably worded on the Report stage. This is the first part of that Amendment, and I ask the House to approve it. What it does is to remove charitable gifts from the scope of Clause 42.

Captain Crookshank: We are very grateful to the Government for having done this. It puts the position back exactly where we were when we started—

Mr. Dalton: As regards charities.

Captain Crookshank: As regards charities, and as regards the other cases in which the five or three years have run out. But what is interesting to those who have studied these things is the fact that in Committee the Amendment of the hon. Member for Twickenham (Mr. Keeling) was to leave out "and two years," and here the Amendment of the Chancellor of the Exchequer is to leave out "and two years."—[An HON. MEMBER: "There are other Amendments."] I am speaking about the one on this Clause. I want to call attention to the fact that when the Solicitor-General then said that they felt in a position to accept the principle of the Amendment, he went on to say:
We are satisfied that it would be right to continue with the period of one year, in the case of charities. I ask the hon. Gentleman opposite to withdraw the Amendment to give us an opportunity to make quite sure that we get the correct wording for the Report stage and to ' vet ' the wording he has used in his Amendment."—[OFFICIAL REPORT, 24th June, 1946; Vol. 424, c. 810.]
The words in the Amendment were "and two years," and the result of the further consideration and the vetting is to prove that he was right in the beginning.

Amendment agreed to.

Further Amendments made:

In page 36, line 9, leave out "periods of three years and one year," and insert "period of three years."

In line 10, leave out "are," and insert "is."

In line 16, leave out from "forty-three," to "from," in line 18.—[The Solicitor-General]

Mr. Assheton: I beg to move, in page 36, line 22, at the end, to insert:
(2) Where by virtue of this Section and of the enactments mentioned in the Tenth Schedule to this Act as amended by such Schedule any property taken under a gift inter vivos or such other transaction as is referred to in the foregoing Subsection is included as property passing on the death of a deceased person the amount of the estate duty (if any) payable in respect of the value of such properly shall be reduced by the amount of the stamp duty paid upon the conveyance or other disposition by which the gift of or other transaction relating to such property was effected.
This is a small point but I think quite an important one, and the matter is not very controversial. The alterations which have been made to the law in Clause 42, dealing with gifts inter vivos, have resulted in the chance of there being some hardship in the case of those who have made gifts inter vivos which have not been completed before the end of the three years. To take an example, suppose some four years ago a man made a gift inter vivos and at that time the property was transferred and a duty of one per cent. was paid on the transfer. Supposing that particular man dies during the course of this year, and duty has to be paid on the estate, the one per cent. Transfer Duty would have been payable in relation to that particular transaction as well as the Estate Duty on the whole amount, and this Amendment merely proposes that in such circumstances the ore per cent. which has already been paid should be accounted, as it were, as a contribution towards the total Estate and Legacy Duties which are due. In view of the changes made under this Bill, and the fact that those who have made gifts of that kind could not possibly have known of them, it is only reasonable that the right hon. Gentleman should accept this Amendment.

The Solicitor-General: We feel on this side of the House that there is no ground at all for this Amendment. Supposing, instead of transferring the gift as a gift inter vivos, the donor had retained it as part of his estate until he died and had willed it by his will, the position would be that Stamp Duty would have to be paid on the transfer to a beneficiary. Estate Duty, of course, would have to be paid in either case. Also the beneficiary would


have to pay Legacy Duty. There is no possible reason why, in the event of a gift not being invalidated, there should be any exemption in the case of Stamp Duty. Stamp Duty is payable in either event, and it does not make the least difference as a matter of commonsense whether the gift is transferred while the donor is living, or whether he leaves it as part of his estate. There is no reason why in either case it should be forgone by the Revenue.

Mr. Assheton: Before the hon. and learned Gentleman sits down, is it not the case that the one per cent. Legacy Duty or Succession Duty would be payable as well as the Estate Duty in the event of the testator dying? That seems to me to invalidate the argument which he has put forward.

Hon. Members: Answer.

Captain Crookshank: I hope the Solicitor-General will answer that conundrum.

The Solicitor-General: May I speak again, Mr. Speaker—

Captain Crookshank: Before the hon. and learned Gentleman does so, may I ask him this question? The giver having died before the expiration of the free period for gifts inter vivos, the gift falls to be considered as part of his estate, but supposing it is to be given to the same person as received the gift inter vivos, there is no question of Stamp Duty being paid the second time, is there? That is what is not quite clear in what the learned Solicitor-General said, and it was to safeguard that position that I think my right hon. Friend rose. Does it have to be paid a second time?

Captain John Crowder: I want to ask this question: If somebody made a trust for his children during 1945, the law was that he only had to live three years to avoid paying Estate Duty and Succession Duty. Since, however, this Finance Bill enacts that he has to live five years, this is really retrospective legislation. Will he, therefore, have to live five years in order to avoid paying full Stamp Duty and Succession Duty?

The Solicitor-General: I cannot really see what the question put by the hon. and gallant Member for Finchley (Captain

Crowder) has to do with Stamp Duty. In the case of a gift, whether it is made before the five year period, or during the five year period, or as part of a testamentary disposition, Stamp Duty has to be paid on the transfer. Therefore, it does not make the slightest difference whether or not the gift forms part of the donor's estate for the purposes of Stamp Duty. No argument which I have heard, either by the mover of the Amendment or by any other hon. Member, has disclosed any case for the Amendment. Therefore, I ask the House to reject it.

Amendment negatived.

CLAUSE 56.—(Receipts by joint authorities to meet deficits.)

The Solicitor-General: I beg to move, in page 47, line 39, after "authority," to insert "to which this Section applies."
This Amendment, and the next two Amendments, are designed to improve the definition in Clause 56. When this Clause was discussed, the question was raised as to whether the definition was aptly worded to include the Metropolitan Water Board. The Metropolitan Water Board is curiously constituted. Its constituent bodies are some 69 local authorities and two other bodies which, are not local authorities—the Thames Conservancy Board and the Lea Conservancy Board. But its precepting powers are confined to certain of the local authorities. That being the structure of the Metropolitan Water Board, it would be questionable whether it fell plumb within the definition of a joint authority which is at present contained in Clause 56. That definition has been reconsidered since the Committee stage. I ask the House to approve this Amendment, with the consequential Amendments following, which are designed to include to Metropolitan Water Board, in addition to those bodies already included in the Clause as it stands.

Amendment agreed to.

Further Amendments made.

In page 48, leave out lines 5 to 12, and insert:
(3) This Section applies to any joint authority constituted under any enactment which is authorised to require from, and only from, those of its constituent authorities which are local authorities any such sums as are mentioned in Subsection (1) of this Section.

(4) In this Section,—
(a) the expression constituent authority,' in relation to a joint authority, means any body corporate which is a member of, or a representative of which is a member of, the joint authority or which appoints a member of the joint authority; and.

In page 48, line 17, at the end, insert:
and includes any joint authority constituted under any enactment the constituent authorities of which are all local authorities."—[The Solicitor-General.]

CLAUSE 62.—(Short title, construction, extent and repeals.)

10.0 p.m.

Mr. Glenvil Hall: I beg to move, in page 51, line 15, at the beginning, to insert:
Save as otherwise expressly provided.
This is consequential upon an Amendment which we have made in Clause 8.

Lieut.-Commander Braithwaite: I am sure that the House would not like this occasion to pass without offering the warmest congratulations to the Financial Secretary for the most lucid intervention he has made for a long time.

Viscount Hinchingbrooke: I should like to second the vote of thanks which has been so ably moved by my hon. and gallant Friend.

Amendment agreed to.

NEW SCHEDULE.—(Women's Services.)

1. Member of Queen Alexandra's Royal Naval Nursing Service or any reserve thereof.
2. Member of the Women's Royal Naval Service.
3. Woman medical or dental practitioner serving in the Royal Navy or any naval reserve.
4. Member of Queen Alexandra's Imperial Military Nursing Service or any reserve thereof.
5. Member of the Territorial Army Nursing Service or any reserve thereof.
6. Member of the Auxiliary Territorial Service.
7. Woman employed with the Royal Army Medical Corps or the Army Dental Corps with relative rank as an officer.
8. Member of Princess Mary's Royal Air Force Nursing Service or any reserve thereof.
9. Member of the Women's Auxiliary Air Force.
10. Woman employed with the Medical Branch or the Dental Branch of the Royal Air Force with relative rank as an officer.
11. Member of the Voluntary Aid Detachments employed under the Admiralty, Army Council or Air Council.—[Mr. Glenvil Hall.]

Brought up, and read the First time.

Mr. Glenvil Hall: I beg to move, "That the Schedule be read a Second time."
This follows the promise made to the right hon. and gallant Member for Gains-borough (Captain Crookshank) that instead of legislation by reference we would actually put in a Schedule the names of the women's organisations which were covered.

Schedule read a Second time, added to the Bill.

Further Consideration of the adjourned.—[Mr. W. Whiteley.]

Bill, as amended, to be further considered Tomorrow.

PURCHASE TAX (EXEMPTIONS) (UTILITY FURNITURE)

Motion made, and Question proposed,
That the Purchase Tax (Exemptions) (No. 3) Order, 1946 (S.R. &amp; O., 1946, No. 873), dated 21st June, 1946, made by the Treasury under the Finance (No. 2; Act, 1940, a copy of which Order was presented on 25th June, be approved."—[Mr. Glenvil Hall.]

10.3 p.m.

Mr. Osbert Peake: I do not think we Should pass this Order, at any rate without some words of explanation from some representative of the Treasury. This seems to me to offer a splendid opportunity for the Financial Secretary to use his great powers of exposition in the House. I do not suppose many hon. Members have a copy of this Order in their hands. It brings about the exemption from Purchase Tax of a. considerable class of what is known as utility furniture. There are two ways of making amendments in the incidence of Purchase Tax. The normal way is to do it through the Finance Bill, and many of our Debates on the Finance Bill have been concerned with alterations and reductions in the rates of Purchase Tax. There is an alternative method provided for by the Finance Act,' 1940; that is, to carry out the same process by means of a statutory Order. The business before the House now is of considerable moment, because it involves the abolition of the Purchase Tax over a wide range furniture.
If hon. Members will look at the Order they will see that furniture specified by


certain words set out in the Schedule to the Order are to be a new class of exempted furniture. The Schedule reads as follows:
Furniture and component parts of furniture, being goods to which the mark shown, in the Second Schedule to the Furniture (Control of Manufacture and Supply) (Consolidation) Order, 1946, is applied.…
We then turn to the Furniture (Control of Manufacture and Supply) (Consolidation) Order, 1946, in order to discover what this furniture is, and to which this utility mark is attached, If hon. Members were to go to the Vote Office and ask for Statutory Rule and Order 225 of this year, they would find, on page 6, a Schedule and a mark—a very singular mark, consisting of two apparently more or less black circles with an incision into one side. That is the utility mark applied to this utility furniture, and the classes of furniture covered are set out in the earlier part of the Schedule. They are:
1. Any furniture of a kind commonly used for domestic purposes, including curbs and firescreens containing not more than 10 per cent. of metal calculated by weight, and wire and spring mattresses;
2. Bedsteads (not being aseptic hospital bed steads) made wholly or mainly of metal.
3. Office and other furniture made wholly or mainly of metal, including garden furniture and industrial storage racks and bins.
During the Budget Debate, the Chancellor, with a great deal of reluctance, made a concession in relation to the Purchase Tax covering what he estimates to be £2 million of lost revenue in the course of a year. I really do not think that the House ought to pass this Order without having been given some idea, first of all, what is the quantity and volume of furniture affected by the Order. Is it going to be £2 million worth of furniture a year, £10 million worth or £20 million worth? I think we ought to be told approximately how much revenue the Chancellor is sacrificing, not only in the current financial year but in a full financial year, by the remission of Purchase Tax over this wide range of furniture.
Of course, there is a great deal to be said for the abolition of Purchase Tax upon this class of goods. Furniture has hitherto been in short supply. Many citizens, restored to their homes, are endeavouring to re-equip them, and, so far as we, on this side of the House are con-

cerned, we shall not, I think, object to the contents of the Order, but we think that the House should be informed of the extent of the Order, the amount of revenue involved in it and the amount of furniture which is expected to be produced during the year of the classes mentioned in the First Schedule to the Order. We must not lose sight of the fact that an exemption from Purchase Tax of this character, as the Chancellor has reminded us many times during the Budget Debate, operates as a subsidy. It means that this sort of furniture is cheaper than it would be if the Purchase Tax was imposed. It is an encouragement to mass-produced furniture, and it is, in that way, a little unfair to the craftsmen who make more specialised furniture. We are living in a world of shortage, however, and, at the present time, we cannot take exception to the Order on those grounds.
Therefore, I am asking that we shall be given some explanation of this matter, which seems to us to be of much greater substance than many of the Amendments we discussed at considerable length during the Budget Debate, and, in particular, we should like to know why this method of Statutory Rule and Order has been followed rather than this matter being brought up by way of an addition to the Schedule in the Finance Bill.

10.10 p.m.

The Parliamentary Secretary to the Board of Trade (Mr. Belcher): I am sure the right hon. Gentleman appreciates that in respect of all utility goods Purchase Tax has never been applied. Certainly that is the case with furniture. When we first conceived the utility furniture scheme, when my right hon. Friend the Chancellor of the Exchequer was President of the Board of Trade, we conceived it in terms of furniture made of wood, and the furniture made of wood under the utility scheme was exempt from Purchase Tax. Now we have a shortage of timber and all we are doing is to extend to furniture made from different materials, the exemption from Purchase Tax which applied in the original case to furniture made from wood I am rather surprised that there should be any doubt at all about the wisdom of exempting something from a tax, particularly Purchase Tax, which I have always understood was regarded as undesirable and unpopular on all sides of the House.
We are trying to protect those people who are endeavouring for the first time —or for the second time having lost their original home—to build up a home for themselves. We are trying to give them goods of a Government specified quality at the cheapest possible price. Therefore, the goods are excluded from Purchase Tax. The question was asked as to the amount of revenue involved. I am afraid it is impossible for anybody to say. Nobody could forecast with any degree of accuracy—not to satisfy this House, at any rate—how much will be produced or how much will be purchased. If one could do that, one could say precisely how much revenue was involved. In fact, we shall produce as much as we can and we shall sell, as hon. and right hon. Gentlemen know, all that we can produce, but what that quantity is I would not like to guess. It will be as great as we can possibly make it and I hope it will be very large indeed. With regard to the question as to why we are bringing it in in this fashion, it is because it is the simplest way to get this furniture on to the market in the shortest possible time and to make provision for the exemption of these articles from Purchase Tax. Hon. Members have had an opportunity, which they have taken this evening, of asking questions about the effect of this particular proposal. I really do not see that there can be any objection to this manner of doing it as there is opportunity for Debate. No other way of bringing this particular proposal before the House would afford any better opportunity of giving the same relief to the people who want to purchase this furniture. I sincerely hope that there will not be any trouble about this. We are not endeavouring to impose something upon people. We are endeavouring to make it possible for the people who need furniture quickly and cheaply to get that furniture.

10.14 p.m.

Mr. Oliver Stanley: As far as I am concerned, there is not going to be any trouble about this. I do not think there has been much trouble taken about the reply which has been given. It certainly might have been concerted a little more closely with the view of the Chancellor of the Exchequer. When the Chancellor of the Exchequer sees on record in HANSARD tomorrow the view of the Parliamentary Secretary to the Board of Trade about Purchase Tax he will see that it is

very different from his. Hon. Members will remember that the Chancellor of the Exchequer told us that the Purchase Tax is a valuable and almost permanent feature—if not a wholly permanent feature —of our fiscal policy. The Parliamentary Secretary has come along and said it is a bad tax which everybody wanted to get rid of—

Mr. Belcher: I thought I had made it plain, even to the Opposition, that it was the Chancellor of the Exchequer who exempted utility goods—and we are dealing particularly with utility furniture—from Purchase Tax. I fail to see any difference between the point of view which I expressed and the point of view which has been expressed in a most practical fashion by the Chancellor of the Exchequer.

Mr. Stanley: I think with tomorrow's breakfast, where he will for almost the last time be able to enjoy a couple of pieces of bread, the Parliamentary Secretary must look at what he said in HANSARD. He will see that although we are all certain that the action he is now proposing has the approval of the Chancellor of the Exchequer, it is very doubtful indeed whether the remarks that he made at large—I take it he was not following his brief—on Purchase Tax will have that approval. But there is a further extraordinary part of his speech. It seems incredible to us, who have had lengthy Debates on the Budget dealing with innumerable subjects and who have become accustomed, especially on the Purchase Tax, to the Chancellor of the Exchequer being able to give us an estimate, which we know by the experience of many years is a pretty accurate one when given by the Treasury, of what any particular concession is going to cost, that, in this case, the Board of Trade is unable to furnish us with any figures whatsoever.
When, on Wednesday, we come to deal with the Purchase Tax and the exemptions from that tax in, if I may say so, the normal way through the Budget procedure, and we ask the Chancellor any questions on the long list of exemptions which he is going to make, whether it is wigs, mousetraps, vermin destructors, or anything else, he will be able to say that the Treasury estimates that it is going to cost so much. The Chancellor is not making wigs, or mousetraps, but the Parliamentary Secretary to the Board of Trade is


making this utility furniture. If the Chancellor can give an accurate estimate of the wigs that somebody else is making, surely the hon. Gentleman can give an estimate of the aseptic bedsteads which he himself controls?

Mr. Belcher: May I point out to the right hon. Gentleman that, just as the Chancellor of the Exchequer does not make mousetraps, neither does the Parliamentary Secretary to the Board of Trade make utility furniture? Both are made by private enterprise under licence and under specification from the Board of Trade.

Mr. Stanley: This is very curious because, usually, when I hear the manufacture of utility articles of any kind being discussed, I hear the Government Front Bench taking credit for it. It is their scheme, they give the licence, they arrange the labour, the priority and the raw materials, and they take all the credit.

Mr. Belcher: That is why it is successful.

Mr. Stanley: But when it comes to asking something about it they have nothing to do with it at all. There is nothing more between the hon. Gentleman and an aseptic bed than there is between the right hon. Gentleman and the wig. If I may say so, in that respect there is no connection at all. All that we have heard tonight confirms us in our regret that it was not possible to do this by the simple procedure of including it in the Finance Bill, or in one of the numerous Amendments which the right hon. Gentleman is making to the Third Schedule in response to discussions in all parts of the House. If it had been, I feel certain that we should have been saved the extremely unorthodox statement of the Parliamentary Secretary on the question of Purchase Tax as a whole, and that we should have got a definite and accurate answer as to what this was going to cost. Although we shall not oppose it tonight, we hope that, in future, it will be possible to follow the more normal practice and give us the particulars which the House expects.

Resolved:
That the Purchase Tax (Exemptions) (No. 3) Order, 1946 (S.R. &amp; 0., 1946, No. 873), dated 21st June, 1946, made by the

Treasury under the Finance (No. 2) Act. 1940, a copy of which Order was presented on 25th June, be approved.

EX-SERVICE PERSONNEL (VOCATIONAL TRAINING SCHEME)

Motion made, and Question proposed, "That this House do now adjourn."—[Captain Michael Stewart.]

10.20 p.m.

Mr. Sidney Shephard: The subject I am raising tonight is that of the Government's vocational training scheme as it applies to ex-Service men and women. At the outset, I wish to point out that it is not working at all satisfactorily. Not only hon. Members in this House, but outside bodies, representative of Service interests, have complained at the lack of scope of the scheme, and also at the inability of the scheme to absorb the number of entrants for whom training has to be provided.
My hon. and gallant Friend the Member for Macclesfield (Air-Commodore Harvey) initiated a Debate some weeks ago on the subject of unemployment. Several hon. Members who took part in that Debate raised this question of the ex-Serviceman who wanted to undertake a vocational training course and all expressed dissatisfaction with the present working of the scheme. A short time ago, the British Legion at their annual meeting expressed themselves in similar terms. They moved a resolution calling upon the Government to expand the scheme so as to include more trades, and also make it possible to absorb beater numbers of ex-Servicemen for training. When the Chairman of the Employment Committee of the British Legion moved this resolution, he said that they were profoundly dissatisfied with the slow progress of the various Government training schemes, particularly having regard to the promises made during Service and in the little blue book, "Release and Resettlement," a copy of which all hon. Members will have had. He went on to say that they had made representations to the Minister, and the Minister had told them that his difficulties were lack of premises, equipment and instructors, but that he was doing all that he possibly could.
When I first read that blue book, I thought what an excellent scheme it was. The booklet was issued long before Germany was defeated, and I naturally


thought that the Government would have made all their plans so that when demobilisation took place there would be no delay and a man would be able to undertake a course within a few days of having made application. What is the present position? The latest figures for 1st July show that 5,499 have completed a course, 17,660 are undergoing a course, but more than 26,000 have been approved and are still waiting—some of them have waited over six months—to undergo one of these vocational training courses. I have no doubt that most hon. Members will have had complaints. I have had many of them.
I would like to read two extracts from letters which I have received, to give some general idea of the type of complaint that we are receiving. The first one is from an airman. He was demobilised in October, 1945, after 12 years' service, and he registered in November for a clerical course. He was told that he would not be required for from two to three weeks. He made further inquiries early in the new year, and he was then told that it would he from eight to 12 weeks before he was called. His leave expired in February, and he was getting a bit worried by then, so he put a further inquiry through to the British Legion and the same answer came back, namely, that he would have to wait from eight to 12 weeks. What he writes is this:
Is this to go on indefinitely? I might add that to seek temporary work as a non-tradesman is a most difficult proposition. In consequence, I am registered for unemployment for the first time m my life, and I feel a great loss of pride and self-respect over it. However, I am not really airing my own grievances but I should like to sec something done about the matter so that future Servicemen on demobilisation are not faced with the same troubles; at least, they could be warned.
The last sentence of his letter—" at least, they could be warned" —hits the nail on the head, because there is no mention at all in this book of any possible delay that might take place. One of the first things I ask the hon. Gentleman the Parliamentary Secretary to the Ministry of Labour to do is to see that a paragraph is inserted in any future edition of this book, warning ex-Servicemen and women that there may be considerable delay before they are able to undertake one of these courses.
I turn to the second case. This was a flight-sergeant who was demobilised in

November, 1945. He applied for training on 13th December, and on 2nd January he attended the Government training school at Leicester for an interview and suitability test. He passed that satisfactorily, and he was told to expect to report for training in five to six weeks. On 28th February, that being the last day of his leave, he went to Leicester to find out what the position was. He was then told he would have to wait a further five to six weeks, and was advised to take temporary work. On 13th March he received a letter from the Newark Labour Exchange telling him that the waiting period had been extended to from eight to ten weeks. On 28th March, four months after he had initiated the first step, he was called to the Newark Employment Exchange and a letter from the regional training officer was read to him by the training officer telling him that the course was reserved for disabled ex-Servicemen, and that he would not be eligible, but they would put him in for another course if he wished. There that man was, chivvied about from 13th December until the end of March, and he was no better off at the end than when he started. I ask the hon. Gentleman who is to reply: Can he wonder that these ex-Servicemen are dissatisfied if this is the sort of thing that is general throughout the country?
I pass from criticism to offer one or two helpful suggestions. In the first place the Minister says the main difficulties are lack of premises, lack of equipment and lack of instructors. Why does not the Minister approach the employers in private firms? Out of all these thousands of men who are undergoing training only 423 are being trained in employers' establishments. It does seem to me that that would be a very easy method of getting over some of the difficulties. Take the clerical course. The first man I quoted applied for a clerical course. There are over 900 men waiting to undergo a clerical course. With regard to that course the Minister of Labour says his difficulty is that training is undertaken in conjunction with the Minister of Education and the course is undertaken in technical colleges, and the difficulty is lack of teachers, Throughout the length and breadth of this country, in every centre of population there is a business college of some sort or another, and very good ones, too. Surely, he could make use of those, which would get over that little


difficulty? I do not think the Minister himself is very happy about the whole situation. I think he will have to adopt more unorthodox methods if he is to make a success of the vocational training scheme.
During the war we trained millions of men, and there was never any question then of shortage of premises; there was never any question of shortages of equipment or of instructors. Yet here we have a mere 20,000 to 30,000 men who want equipping for civilian life, and we say we cannot train them because we have not got the premises, equipment or instructors. If the right hon. Gentleman wants premises, why does not he go to the President of the Board of Trade, who has still over 70 million square feet of industrial floor space under requisition? Could not the President of the Board of Trade let him have a little of that? If he wants equipment, surely he has an overriding priority over home production? If he wants instructors, let him appeal to the trades concerned, and I am sure they will be forthcoming. I want the Minister to treat this problem as one of urgency. In my opinion, it is nothing short of a national scandal that we can fall down on the training of so small a number of men compared with the huge number we trained during the war. I do not want to make political capital out of the misfortunes of ex-Servicemen, but I do remind the Minister of that Labour classic, "Let us Face the Future," and what is said there about the ex-Servicemen. I think it is worth repeating to hon. Members opposite:
The gallant men and women in the Fighting Services…deserve and must be assured a happier future than faced many of them after the last war. Labour regards their welfare as a sacred trust.

10.31 p.m.

Mr. James Callaghan: I think the sympathetic and reasonable approach of the hon. Member for Newark (Mr. Sidney Shephard) commands our support, because this is not really a party issue. The trouble, as it appeared to us in the Services, was that both the blue book and the official Ministry of Labour lecturers came before the scheme was ready. They were pushed out into the Forces in order to keep up morale, and in the spring of 1945, when nobody anticipated that the Japanese war would come

to an end so quickly, I remember the official lecturers coming to Trincomalee and painting this scheme in glowing colours—as late as May, 1945. From the point of view of the scheme, it was in fact unfortunate that the Japanese war came to an end so soon afterwards. No doubt, when my right hon. Friend the Minister of Labour took office he was faced with the position—through the fault of no one in particular, and I am condemning no one—of having to start from scratch and get the scheme working. That does not excuse delays now, and I heartily reinforce the plea of the hon. Member for Newark that this should be regarded as a matter of extreme urgency. Nothing is more dispiriting than for a man to come out of the Services, having read these official publications and having heard the lecturers but not knowing the reasons why the scheme has not got going, and then to find himself in some blind alley employment, or in a job which he does not want to retain.
With all respect to my hon. Friend the Parliamentary Secretary who is to reply, I do not think sufficient urgency has yet been imparted into this scheme. Since this matter was raised on a Supply Day one Friday—I think on 3rd May—there has, undoubtedly, been an improvement and the two-shift system has been introduced in certain of these training establishments so that, no doubt, the scheme is going ahead much faster. If the Parliamentary Secretary intends to tell us that he will not be able to absorb all the waiting list before December, as we were told on 3rd May by the Minister, this is not satisfactory and I think we ought to go ahead faster in absorbing all these people. As a practical point may I say that No. 5 formation college at Luton, which was set up by the Army last September and on which thousands of pounds of public money has been spent, in order to do what is largely a pre-demobilisation job, is doing exactly this sort of work. For reasons best known to themselves, the War Office are closing down that college. Will my hon. Friend investigate the possibility of taking over that very fine building, which has workshops already built, and turning it into a Government training centre? I do not expect an answer "yea" or
"nay" tonight, but I hope he will investigate the possibility. This is a matter of urgency and the cases which have been brought


to our attention are disturbing to those of us who are—as we all are—interested in the welfare of the ex-Serviceman. I hope we shall press on with the scheme as fast as we can.

10.34 p.m.

The Parliamentary Secretary to the Ministry of Labour (Mr. Ness Edwards): I am very sorry that there is so little time available in which to discuss this very important question. No one can have any objection to the tone of the speeches or the way in which it has been raised. It is an extremely urgent matter and one of great concern to a large number of men. Having said that I should like to point out that, in the first place, the leaflet that was issued to the Forces, was distributed before this Government came into office. Although I am not complaining about this, promises were made before this Government took office, and subsequently a further leaflet was issued called "Government Vocational Training Schemes." This leaflet—and I think this meets the point of the hon. Member for Newark (Mr. S. Shephard)—has been widely circulated in the Forces and does warn members of the Forces of the delay that may arise with regard to vocational training. In that sense, the point which the hon. Member made was anticipated some three months ago, by the issue of this leaflet.

Mr. Shephard: Is that leaflet handed to every man on demobilisation?

Mr. Ness Edwards: I understand that it is made available, at demobilisation centres, to persons who ere demobilised. I understand that there is the widest dissemination of this leaflet among the Forces.

Mr. Shephard: But it is from the leaflet, "Release and Resettlement," that the man gets his first impression. Should not the leaflet to which the hon. Gentleman has just referred, be issued along with that one, so that the two can be read together?

Mr. Ness Edwards: My information is that it is issued to every man, but I would like to check that, in order not to mislead the House. When we went into the Ministry the first thing we looked at was this question of training. We saw that there were available, in August of last year, places for 3,716 persons. That was

the total number of places available in the training centres after the end of the European war. Our great task was to increase, as rapidly as we could, the number of places for training, particularly for ex-Service men. I want to give the House some indication of the way in which the programme has been not only triplicated, but built up to its present scale. In July, 1945, the total number of training places was 3,616. This was at the time when that leaflet was being issued to the Forces, the time when Ministry of Labour lecturers were going around and telling men in the Forces about this vocational training scheme and about all the places that were available. In August, when we took office, the number was immediately increased by 100.

Sir William Darling: Lecturers?

Mr. Ness Edwards: Places. By December, the number had been increased to 5,300. On 8th April, it was 10,000. In June, it was 14,000, and now it is going up at the rate of 2,000 per month. It is planned that by December there will be places for 28,500.

Sir W. Darling: On the two-shift system?

Mr. Ness Edwards: No; places without the two-shift system. It is now proposed that in some of these training centres, where it is possible—and travelling has something to do with this, as will be appreciated—the double shift should be installed. It started in the North-East region, and is now being extended to other centres. We hope, by this means, to increase the number of places available for applicants. In the building trades, instead of giving six months at a centre we are giving four months, and two months on the job. But here is our difficulty: we cannot cut down the training time to such an extent as to flood the building industry with more apprentices than it can take. That is one of our difficulties now. To the extent that the industry develops, it will be able to take more and more. To the extent that we get skilled men back into building, we shall be able to add to the dilutee labour, and we are waiting for the extension in the number of skilled personnel in the building industry so that we can pump more and more trainees into the industry to finish their training.

Lieut. - Commander Joynson - Hicks: Does the hon. Gentleman say that the building industry is refusing to accept further apprentices at the present time?

Mr. Ness Edwards: No, it is not refusing. In fact, I must say of both sides in the building trade generally, that they are being extremely cooperative, but I am sure the hon. and gallant Member will realise that we cannot put more trainees into the building industry than the industry can supervise in their training. To get too great a density of trainees in the industry would be to decrease efficiency in the industry and to leave men without adequate skilled supervision, which is highly desirable in the last few months of training. As far as the building industry is concerned, it is being extremely helpful in this matter. Another point that was raised concerned technical schools. I feel sure that the hon. Member for Newark will be pleased to have the information that in July, 1945, there were 330 in technical colleges, and now there are 2,026, and we shall take every place that any technical college in this country can give us for training.

Sir W. Darling: Does that include commercial colleges?

Mr. Ness Edwards: I am taking, first, the technical colleges, and I say that, with regard to them, we shall take every place they can give us. We are pushing them for all we are worth, so as to provide opportunities for these men to get their training as quickly as possible. I come now to the question of private colleges, to which reference has been made. Not all private colleges are suitable. Some of them, which have very high reputations, we are using. We have to exercise some discretion in this matter, and I cannot make the same open declaration about all the private colleges as I can make about the technical colleges, but in so far as private colleges of repute can offer us opportunities of places for training, we shall take them. We are using a considerable number of private colleges for this purpose.

Sir W. Darling: And correspondence colleges?

Mr. Ness Edwards: Correspondence colleges are not regarded quite as full-

time vocational training. We do not want to give training on the cheap. We want to give efficient and fulltime training in the best possible circumstances, so that these men can get the maximum benefit. The hon. Member for South Edinburgh (Sir W. Darling) may disagree with me on this point, but we ought not to be open to criticism on the ground that we are providing inadequate training for the trainees under our vocational training system. Once we became subject to criticism of that sort, it might damn the whole scheme, and do irreparable damage to the men going through the training centres. A number of other points were put to me with regard to our getting on faster. I want to assure hon. Members that we are going as fast as we possibly can, having regard to the absorption of those men on the completion of their training. We have had the position that we have turned out painters on the North-East Coast who have had to remain idle because painting work has not been available.

Mr. S. Shephard: The hon. Gentleman says the Ministry are going as fast as they can, but I would point out that only 423 of these men are being trained in employers' works. Will he explain that matter?

Mr. Ness Edwards: I am much obliged to the hon. Gentleman for raising that point again. We are providing for training on the employer's premises. We are subsidising the training of men on the employer's premises, but the great difficulty we are up against is this. Take, for instance, the furniture trade. There is a tremendous demand for cabinet making but the difficulty in that industry is that it has not sufficient raw material for its own employees. Therefore, the more trainees we push out, the smaller the quantity of timber in comparison with the number of men available to use it. That applies not only to that trade but to other trades as well. In the hairdressing industry, we have a similar problem. I was not thinking of the sight that meets me in the mirror every morning. I refer to the problem of equipment after we have trained the men. The absorption of the men we have trained is the difficulty with which we have to contend. The question of the establishment at Luton has been raised. I have been interested in that and with-


out going too far I want to assure my hon. Friend that the greatest pressure is being brought to bear upon the Departments concerned, with that establishment, to make it available for a training centre for the men who are waiting.
The picture is not one that gives reasons for self-satisfaction. I admit that we have to apply all the energy we can to get these men trained as quickly as possible, and then have to put up with the consequences in industry afterwards. We are training for 40 trades and as regards each trade there has been an agreement with both sides of the industry as to the volume of trainees. Here is one difficulty with which we are faced in the building industry. In the building trade, we want more bricklayers. But everyone wants to

be a carpenter or a plumber. We cannot have carpenters or plumbers in excess of the work provided initially by the bricklayers. We have to try to get that balance, and in that connection, we are advised by both sides of the industry, in regard to the various trades. I assure the House that this is a matter of grave concern to our Department and that we are putting behind it all the energy we can, to give these men all the training that is required, at the earliest possible moment.

Adjourned accordingly at Eleven Minutes to Eleven o'Clock.